The relationship between the management company Amsco and a diamond mine in Zimbabwe was "unwise," a spokesman of the Dutch Ministry of Foreign Affairs told Radio Netherlands Worldwide. However, no prosecution will go ahead as the Zimbabwean mine in question has not been registered on an official black list.

Amsco is registered in the Netherlands and became discredited last week because of its alleged links with the River Ranch Diamond Mine in Zimbabwe. The case came to light in the Netherlands following a Radio Netherlands Worldwide investigation.

Amsco supports companies in developing countries by giving managerial support to Zimbabwe based companies. In the case of River Ranch Diamond Mine Amsco granted support through technical assistance from 2004 to 2007.

In recent years Zimbabwe has experienced political turmoil and hyperinflationin. As a result of the unstable situation the country has experienced a run on gold and diamonds. Instability has also led to an increase in diamond smuggling among the local population, particularly in the eastern parts of the country. "It is very likely that in the Southern region of Zimbabwe, near the River Ranch Diamond Mine, diamonds are also being smuggled", Anton Dekker of the Dutch Institute for Southern Africa (NIZA) told us.

One of the shareholders of the diamond mine, , Solomon Mujuru, is on the sanctions list of the European Union. He is a political supporter of President Robert Mugabe of Zimbabwe and a prominent former guerrilla leader under Mugabe. The European Union sanctioned Mugabe in 2002 due to violations of human rights.

Amsco is financed by the World Bank, the United Nations Development Program and the Dutch Development Bank, FMO. A spokesman of FMO claimed not to have known that activities of River Ranch Diamond Mine were controversial, because the mine is not one the black EU-list. "As a development bank, FMO always runs more risks than other banks that cannot or wouldn't dare to invest", the FMO spokesman explained.

Whether ABN Amro, a banker of Amsco, was aware of the controversy is unclear. The bank does not want to comment on the story.

The management of Amsco has confirmed it will be investigating the matter internally and has already broken all contact with the Zimbabwean mining company .

source: RNW

photo: flickr/adamcohn