First Element, which is currently marketing diamonds produced by the Zimbabwe Diamond Consolidated Company (ZCDC) has come under scrutiny as the country’s stones continue to fetch low prices, according to media reports.
Zimbabwe allegedly sold 71 000 carats of diamonds last month at average price $14 per carat to earn $1 million.
The Zimbabwe Independent quoted unnamed sources as saying that First Elelemnt had a “dodgy past and lacks capacity as it was booted out of Botswana for allegedly undervaluing and smuggling diamonds”.
"It (First Element's exit) was because of undervaluation and smuggling of diamonds, but the official word is they ran out of diamonds," an unnamed Botswana intelligence source was quoted as saying.
"First Element was doing their shenanigans and it was exposed, but the government couldn't do much because they are linked to top officials."
However, First Element executive director and country manager for Zimbabwe Tim Wilkes dismissed the allegations of shady deals.
"We had a contract with Firestone Diamonds at their BK11, but they ran out of diamonds so our contract ended."
Another unnamed source said to be “close” to Zimbabwe's Minerals Marketing Corporation (MMCZ) alleged that First Element had become a “monopoly”, cleaning and tendering Zimbabwe's diamonds.
Data released by the Kimberley Process in June showed that Zimbabwe exported 3,89 million carats last year raking in $168,6 million at an average price of $43.24 per carat.
Diamonds from Marange were historically said to be of poor quality and brownish in colour.