Zimbabwe: Illusion, Intuition, and the Truth

I have been in Harare Zimbabwe for a week. I am sitting at the very modern and quite well laid out airport waiting for my flight home. I live in Northern California and it takes 4 flights and over 35 hours (including stopovers) to get from Harare to Sacramento. I live on six beautiful wooded acres. I am in the majestic California mountains half-way between Sacramento and Lake Tahoe. Having traveled all over the world, I know I am one of the luckiest people on this planet. I live in a mountain paradise.

A few weeks ago I came to Zim for the first time. I had read much about Zimbabwe in the American press and was expecting to come to a repressive, military run country, where soldiers could be found on every corner harassing the impoverished, unhappy people.

I have been to many African and Asian countries, and have seen my share of poverty, filth and deprivation. I expected the infrastructure of Harare to be beyond repair and for the roads to be potholed and crumbling. I thought I would see the sick and beggars everywhere. I was sure Zim would thrust in my face, the suffering of humanity as I have seen in other third world countries.

I was absolutely shocked and amazed to find a modern, clean city. There were no beggars, sick, or indigent anywhere to be seen. The roads were in good shape by African standards and the only soldiers I saw were outside the President's residence compound. Interestingly, when you pass the President's residence you are not allowed to take any pictures and absolutely forbidden to point your fingers or hands towards the guards. I drove by his residence twice, and each time I was warned by my taxi driver. I later found out that the guards were under great stress when people pointed at them as they drove by because they could not tell if someone was just pointing their finger or if they might have a gun in their hand. You could imagine the stress if you were on guard duty and people kept sticking their hands out the window at you as they drove by. Guards, who are less stressed, are less likely to make mistakes and are more likely to go home to wife and family a lot calmer.

Some of the African countries I work in are friendly to foreigners, some, not so much. My experience in Zimbabwe has been that the people are warm, friendly, and respectful. I met people in various levels of society and felt welcomed by all I met. This is not to say everyone in Zim loved me. One man on a street corner glared at me with anger in his eyes. I smiled back knowing he must have read some of my other articles and is a critic.

The reason I describe Harare is because I am not happy with the misinformation I have received through the press and thought people show know the truth. Harare is a nice city and the people are sweet-natured.

The President, Mr. Mugabe has his admirers and his detractors. Amusingly, some of his supporters I spoke too raised concerns over some of his policies, and some of his detractors praised him. I am not a political commentator on the policies and procedures of countries I visit. I am not a political commentator on American politics and procedures either. I cannot afford to be a target of the NSA or the IRS

This article, if I ever stop rambling, is about doing business in Zimbabwe now that the EU sanctions have been lifted. I use LinkedIn and my website to reach prospective customers from around the world. Because of my high visibility, I often receive offers to go to Zim to purchase rough diamonds. Up until recently, this was not possible. Just as a quick side-bar, the sanctions imposed upon Zimbabwe have been effective in creating a great deal of damage to the economy.

I know the sanctions are imposed to try and affect regime change, but that strategy has been counter-productive. The people I spoke with don't blame Mr. Mugabe for their suffering and hardship, they blame the West. The banks have a severe liquidity problem and the poor and the average person are the ones who are paying the price for the sanctions. White, black, green or yellow, everyone I spoke to about the sanctions wanted to tell the West that it is they the folks, who are suffering and paying the price.

Back to diamonds. As I was saying before I was so rudely interrupted, I am approached to buy Zim diamonds at least once a week. Everyone tells me how easy it is to buy in Zimbabwe. They tell me they can bring me vast quantities of goods of the highest color, shape and clarity. Not having any experience in Zim, it was quite difficult to determine the truth. At any rate, I was not allowed to go to Zim and did not feel any need to find out the truth.

The American government has now removed the restrictions from the country and you can now bring in Zimbabwe diamonds into the US The caveat is, there is a 25 page list of individuals who Americans cannot do business with. Perhaps, because I am not accustomed to trying to get information, I found it difficult to find out who is on this list. I spoke to my contact in the Ministry in Zim and was told there is only one mine; The River Range that is not on the list. Incidentally, it is closed. You cannot bring Zim goods into the US without risking the stones will be seized indefinitely.

A few weeks ago, a British-South African group hired me to go to Zim to pick and evaluate diamond parcels for them. They had substantial orders. They were working with two seasoned, professional gemologists from South Africa, but needed my help to prepare the parcels for the customers. After much consideration, they kindly allowed me to bring forward some of my customers. I know how my customers work and I know their needs and concerns. We worked together to try and match the needs of their sellers with the needs of the buyers. If any of you have ever had any dealings with wealthy and powerful sellers and equally wealthy and powerful buyers, you know this can be a challenge.

We were able to work out a deal for two of my buyers that were acceptable to each side. We placed the order for our demands and were given a price that was agreed upon. The banking, terms and shipping were to everyone's satisfaction and SPA's (Sales Purchase Agreement) were signed.

The British-SA company was also new to working in Zim and was instructed on the requirements of the Zim government in order to purchase diamonds legally in ZIM. They soon realized it would take more than a few days and decided to send the three of us gemologists home while they completed the country requirements.

In the meantime, one of my good friends, also a client, had contracted to buy a very large parcel of rough in Zim. He needed a gemo to do the picking, evaluation etc. and hired me to go to ZIM.

I arrived here last Wednesday. I really did not want to go, because I had Thanksgiving plans with family and friends and was really looking forward to the Thanksgiving weekend. My friend told me that he had an appointment at the MMCZ (Minerals Marketing Corporation of Zimbabwe) the channel for the export of all Zimbabwe's minerals and metals, and that I absolutely, positively, had to be there on Thursday. He had worked on this for many weeks. I owed him a large favor. In addition, I was promised a very, very substantial amount of money to do the deal. ($ 3,000,000).
I made my apologies, to my wife, kids and friends and totally disrupted the family dinner plans. You see; I am the cook at my house, and I say with some false modesty, that my cooking is relished by my friends and family.I left Monday, and spent the next 40 hours flying and waiting and flying and waiting. I arrived late Wednesday and was pretty damn tired.

The sellers were to come pick me up Thursday morning. I did my best to sleep, which is difficult when you are on a 10 hour time difference. I awakened, worked out, showered, ate quickly, and dressed in suit and tie. I received an email. The seller's rep apologized because his flight from South Africa was delayed and he would not be at the hotel until 12:30 PM

It is what it is, I sighed, and waited, I waited and I waited. 2:45 PM No one showed up, no call, no email.

Not until late that night did the seller's people contact me and tell me there were some "issues" they had to deal with that caused the delay. It is better to overcome the issues and not show up, then to show up and have issues. They told me they rescheduled the meeting for the next morning. I thought to myself, they must really have some pull at the MMCZ in order to miss an appointment. Getting an appointment at the MMCZ is no small matter. Maybe I really am dealing with people who are on the "Presidential Level" as I was told. It was my understanding that new customers never missed an appointment with MMCZ. If they did miss the appointment, it would be highly unusual to receive another one the very next day.

Okay, it's Africa … Hurry up and wait.

Friday morning, I repeated my routine and sat waiting for the seller's rep to take me to our new appointment at MMCZ. I waited, and I waited, and I waited. No one showed up, no one called, and no one emailed. Now, I have never been called the brightest bulb in the pack, but even I know you do not stand up a government agency two days in a row.

Later that night, I was told that the seller's rep had not come because he was working on my behalf to fulfill the government requirements for gemologists to enter the vault. When I asked why this had not already been done, he at first could not answer and then mumbled some bull. I asked him why he had not called, and again more lies. He then said he came to my hotel at 6:00 PM but could not reach me. This was surprising as I was sitting in my room eating dinner.

I am a patient man. A gentle man, but I cannot stand liars. I refuse to deal with people who lie to me. I did not know what was really happening, but I knew these people were not for real. I wrote to my customer and to the seller's with a simple sentence; "I am done!"

For the next seven hours the sellers begged to talk to me. They called my hotel phone until 1:00 in the morning. They Skyped every 15 min. My email was filling up fast. Finally, I responded on my email and said; "Let me make this crystal clear, I am done."
Now I am getting emails telling me they have a definite appointment on the next day, a Saturday. Since the MMCZ is closed Saturday, they would have to have an extremely powerful person to get the MMCZ to open. Especially, since they had missed two appointments already. In addition, they are telling me I should be a man of my word since I had told them on Thursday night that I would give them until Saturday to get me into the MMCZ.

I pride myself on the use of logic and reason. I try to make important decisions after carefully weighing the situation, looking at my options and anticipating the outcome or results of any actions I may take. In this case, they swore they were not lying, just delayed. Rude yes, but liars, no!

As you can imagine, everyone in this deal was raging mad at me, especially, my friend who had much to gain and a lot to lose. Put yourself in their place, this deal took weeks and many man hours to put together. Costs were incurred to provide an MT199, (Proof of Funds doc) and MT799 (Blocked funds doc) and other expenses that go with putting together a deal in the hundreds of millions. So many people, so many dreams of wealth.

For me it was in some ways difficult and in some ways easy to decide what to do. On the one hand, all these people were completely dependent on me to make this deal a reality. I did not have any empirical evidence that would convince me not to go forward. After all, maybe they really did have the connections and power to do this deal. Anyone who can put hundreds of millions of dollars of diamonds together would have to be very, very powerful. In addition, if the deal worked I was a rich man. All the money I have lost over the years would be in my bank account by next week. Indeed, if I was wrong about stopping the deal, I would severely and permanently damage my reputation. To make a bad situation worse, I would probably be sued by multiple parties with deep pockets and $ 500 an hour lawyers.

For those of you who use intuition to guide your decisions, this decision would be a no-brainer. My intuition was screaming at me to get the hell out of Dodge! Logic and reason be damned. When you spend a lifetime taking risks and putting yourself in dangerous situations you come to rely on your intuition more than on what appears to be. In this case, I just knew this deal was no good and despite the risks and losses, I was not going to go through with it. I was going to bet the farm on my intuition.

Just then, I decided to phone a professional friend of mine in Zimbabwe on an unrelated matter. After discussing the situation I was in without divulging the details of my clients, I asked for a second opinion on how deals are completed in Zim. According to the regulations my friend cited me there seemed to be, as I suspected, some serious problems with this deal. I was advised of the correct procedures governing the exporting of rough diamonds from Zimbabwe, and that if my deal did not follow legal regulations I could end up in jail !. I had already decided to follow my own intuition and abort this deal.

The next day, I took a cab to the Emirates Airlines office in Avondale, a beautiful suburb of Harare. The houses are stately and the grounds beautiful and well maintained. In the middle of this residential area sits the Emirates office. I was tired, stressed and just wanted to go home. Of course, as luck would have it, the flights were booked solid for weeks and I had no choice but to stay until today, Wednesday.
Somewhat depressed, I took the cab back to the hotel. Once at the hotel, I emailed my client and informed him I would eat the $ 4000 cost of the trip. Now, I not only did not make money, I was out $ 4000 for my trouble.

The calls and emails stopped. I spent Saturday and Sunday thinking. I decided that since I could not get out of Zim, I would utilize my time by finding out all about the diamond business in Zimbabwe. I found the numbers for the Government Geological Department, and the Ministry of Mines.

I have gone through this process in several African countries and am familiar with the processes of these ministries. I find it wonderful that the people who work in these departments are happy to hear from foreigners who come to their country and want to know how to do business legally and ethically. I was somewhat surprised and very happy to make an appointment with Zimbabwe's top geologist who allowed me to come to his office for instruction on the diamond resources of the country.

The geologist was a slight man in his 40's with bright, kind eyes and was obviously very passionate about geology. His office was a typical office, except he had shelves going across two walls which were filled to capacity with maps, reports and rocks of all sizes and shapes. It could not help but look messy. However, when he went to show the different maps he had, he was able to instantly find the right geological maps.
Like all great teachers, he explained in methodical detail the various diamond areas. All of them were clearly marked and even the diamond concessions were drawn and detailed. He showed me each diamond bearing area and described the geological formations and peculiarities of each mine. There is even a region where the diamonds are elongated or strangely shaped octahedrons. He explained that the diamonds in this unique region had formed more than a billion years ago and had then found themselves under great heat and pressure causing them to liquefy and warp and bend into unique shapes.

The contracts that were presented to my clients were 5-20 carat, DI color, VVS-SI. They were supposed to be Sawable 1, Sawable 2, Makable 1 and a small percentage of Makable 2. (See Google for descriptions and pictures of these diamond shapes), However, all of the stones were supposed to be without the typical iron coating that covers most Zimbabwe diamonds.

I asked the geologist if Zimbabwe produced diamonds in abundance without the heavy coating. He told me there were only two mines in Zim that produce diamonds without the coating. One produces very small gems under one carat and the other is currently undergoing Ownership changes.

The question arises; How could these suppliers have hundreds of thousands of carats of large uncoated Zim stones when the geologist who has been to every mine in Zimbabwe says that do not exist? There are two possible answers; the suppliers are lying, or, the goods are not from Zimbabwe and have been smuggled into the country illegally.

The likelihood of smuggling in such huge quantities is quite unlikely. Too many people would know about it, and it would require the corruption of everyone in the MMCZ and the Ministry of Mines. The manifests and deals being offered with transparent stones are scams.

I now knew my intuition was correct. I was right to walk away from the deal. No one can blame me now and some owe me. My next appointment was with the new Minister of Mines, I met him for all of 10 seconds. Our appointment was canceled because the President had summoned him and he had to go immediately to the President's office. The Minister's secretary is a kind lady and directed me to a gentleman she felt would be very helpful in answering my questions.

This young man is also in his early 40's. He is very articulate and you can see a keen intelligence in his eyes. The wonderful thing for me, is this man is a high ranking official with duties in every sector of the diamond industry. He knows all the procedures, laws, requirements, banking, KPC regulation, and most importantly, he knows the banking and shipping laws and procedures. In other words, I had hit the jackpot. All my questions could be answered.

Lets go back to the question of coated stones. I asked him the same question about coated stones that I had asked the geologist. As you would expect, he gave me the exact same answer. He also told me he had heard rumors that large quantities of uncoated goods were being offered in the market. He said it was a complete scam as they do not exist.

In addition, it is impossible to buy CIF in Zimbabwe. They do not use, or accept an MT199, MT799, na MT103, SBLC or an ICBPO. The law states that no diamonds can leave Zimbabwe unless it is paid for first. This means my clients deal could not possibly happen legally. He had arranged an MT199 and and SBLC to buy CIF.
One other thing, when you buy from the MMCZ, you must be approved for purchases. There are a number of requirements one must meet and if you pass those requirements, an invitation is sent directly to the buying company. IT IS ILLEGAL TO BE A CONSULTANT IN ZIMBABWE. This means that the company who is buying is the company whose name will appear on the government invoice, shipping and KPC, and is the company paying for the diamonds. Anyone who tells you anything different is lying or ignorant of the truth.

This nice man cares greatly about his country and its reputation. They outlawed consultants finding no other way to rid themselves of the scammers. If you want to buy in Zimbabwe, you must apply and be accepted by the Zimbabwe government. You cannot pay for it after it leaves the county, there is no Brink's or Malca-Amit office and there are few uncoated stones.

If you or a loved one are currently involved in a deal to purchase Zim diamonds and are told any of the above lies, then walk away quickly. If you are in the middle of one of these deals and my article saves your rear, reputation, valuable time, money, and energy, then you can pay me back by donating $ 1.000 to your favorite charity in your name. This will show you are thankful for the blessing and you are not foolish, ignorant, and greedy.

For those of you who wish to do business in Zimbabwe or other African countries. Do your due diligence. If you do not have the connections, skills and experience to do so, then hire a rough diamond gemologist who does.



Source by Louis Pearl

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