Zimbabwean civic groups are calling on London investors to shun the listing today on the stock exchange of Oryx Diamonds, charging it will further fuel the Congo war and channel profits to President Robert Mugabe and the Congolese leader, President Laurent Kabila.
Shares in the new company, Oryx Diamonds Ltd, are to be offered on London's Alternative Investment Market.
The pursuit of Congo's "blood diamonds" is draining Zimbabwean state coffers while at the same time enriching Mr Mugabe and his inner circle, alleges the anti-corruption group Transparency International. "Why should international investors put money into something that is personally benefiting Mugabe and his ruling clique?" asks Mr John Makumbe, chairman of Transparency's Zimbabwe branch.
"It appears that Zimbabwe's 13,000 troops in Congo are there to protect the diamond mining which will funnel money into the pockets of Mugabe and his cronies. It is the Zimbabwean people who are paying for the war, but it is the ruling circle who are personally profiting from the conflict."
Zimbabwe puts a new twist on the "conflict diamond" scenario in which rebel groups use the proceeds from diamond mining to pay for their wars. This is the case in Angola and Sierra Leone.
But in Zimbabwe's example the government is funding the war, estimated to cost more than $350 million per year, while top government and army officers have a private company to reap the diamond profits.
Zimbabwe's troops are concentrated in eastern Congo around Mbuji-Mayi, the centre of Congo's diamond mining. The Oryx diamond concession is near Mbuji-Mayi.
The diamond deal is especially questionable as it comes shortly before Zimbabwe's general elections, on June 24th and 25th. If the opposition Movement for Democratic Change (MDC) wins control of parliament, it will quickly order the withdrawal of Zimbabwe's 13,000 troops in Congo.
"It is dismaying that President Mugabe, senior army officers and ruling party officials are involved in shady deals to exploit Congo's diamonds for their personal benefit at the direct expense of Zimbabwe as a nation," said Mr Makumbe. "We are gravely concerned about this sleazy and opaque deal involving diamond mining concessions in the Congo."
The company is the product of a tangled web which includes senior Zimbabweans, Mr Kabila and South African mining entrepreneurs. Oryx Diamonds is the result of a $74.5 million takeover of the London-listed Petra Diamonds by Oryx Natural Resources, an Omani company registered in the Cayman Islands. The purpose of the new company is to manage a large diamond concession in eastern Congo which is estimated to have reserves of industrial and gemstone diamonds worth well over $1 billion. The Zimbabwean objections to the listing of Oryx Diamonds are supported by the London watchdog group, Global Witness.
"We totally disagree with the flotation of Oryx on the London stock exchange," said Mr Alex Yearsley, a Global Witness campaigner.
"It doesn't matter what definition you use for conflict diamonds, it is very clear that the proceeds of this diamond deal is being used to finance interested parties in the conflict.
"Given the current international attempts to curb the trade in conflict diamonds, it would be inconceivable that this company should be allowed to trade openly on the AIM market."
He said the British government should put considerable pressure on stock exchange regulatory bodies to prevent Oryx from being listed. "There are far too many questions about Oryx," said Mr Yearsley. He said human rights groups in England and Zimbabwe were pressing stock exchange authorities to refuse the listing.
Zimbabwe's involvement in the Congo war is having a disastrous effect on the country's economy. It has left the country so short of foreign exchange that there has been a crippling fuel shortage for more than six months.
This week Zimbabwe began to experience power shortages because the state cannot afford to import sufficient quantities of electricity.
The fuel and power shortages, as well as inflation of 60 per cent and unemployment of 50 per cent, are reasons why Mr Mugabe has become widely unpopular. Mr Mugabe and his ZANU-PF party are held responsible for the collapse of Zimbabwe's once strong economy. "The world's fastest-shrinking economy" is how economists describe Zimbabwe's Gross Domestic Product, which is forecast to contract by as much as 10 per cent this year.
"The diamonds have become the motivating force for keeping Zimbabwe in Congo and that is ruining the Zimbabwean economy," said Mr Makumbe. "Mugabe may get riches from the diamonds but it is the people of Zimbabwe who will pay the cost. It is the poor of Zimbabwe who will pay for the Congo war. The unemployed, those who suffer from the collapse of our social services, those who suffer from our devaluing currency, they are paying for the war and the diamond venture. The war is dragging everything down."