Ziare: Motubu Takes the Diamonds fromn DeBeers

A classic dispute recently erupted in the diamond industry, pitting the world's largest diamond producing country -Zaire-against the major diamond multinational, the South African De Beers company.

For the past 14 years, De Beers has purchased all of Zaire's diamonds and sold them on the world market. No longer. In early April, Zaire's president Mobutu Sese Seko announced that the state mineral marketing board, Sozacom, would sell the country's strategic minerals, including diamonds. By June, Sozacom had arranged to sell a shipment of diamonds to four European countries-but not to De Beers. Zaire's government considered De Beers' 25 percent take on diamond sales to be excessive, Africa Confidential magazine reported.

Zaire produces 40 percent of the world's industrial diamonds and 5-10 percent of the gem diamonds. De Beers handles the marketing of 85 percent of the world's diamonds.

Though Mobutu's move may give more control of the diamond industry to the Zairian government, it may not help out the majority of people in that central African nation. As much as 50 percent of Zaire's diamond production is illegally smuggled out of the country, often by corrupt government officials. And the legally obtained revenues routinely get distributed among Mobutu and a small elite of his officials and friends. In this context, the De Beers break may not be all that significant. "It's probably based on where Mobutu can get the best deal for himself and his cronies," says David Gould, Zaire specialist at the University of Pittsburgh.