The much anticipated auction of controversial Zimbabwe diamonds, which created an air of expectation, that the country's economic plight will be eased or even improved.



Unfortunately, the diamonds – though successfully sold – realized only a fifth of their value, and most of the proceeds are expected to benefit controversial mining companies.



The Kimberley Process Certification Scheme - an initiative to prevent conflict diamonds from entering the multibillion dollar global market - allowed Zimbabwe to sell diamonds from the Chiadzwa area of Marange in Manicaland Province.



It is estimated that Zimbabwe would need about $8 billion dollars to resuscitate the economy. According to mining minister Obert Mpofu the auction raised $56.4 million, of which the government will receive $30 million.



Eric Bloch, an economic analyst, told All Afriaca that ahead of the auction it was hoped the diamonds would sell for US$400 to US$500 per carat, but only "around $80 per carat" was achieved.



"Contrary to the current popular feeling, there is little evidence that diamonds will translate into our economic panacea," Bloch said. "Hopes can easily turn into disillusionment; the economy will not turn around overnight, and the gains will be minimal for some time."



The government will receive 10% in royalties and 25% as corporate tax from profits made by the mining companies, while the Zimbabwe Mining Development Corporation (ZMDC).



"What many people are failing to realize is that the bulk of the money will not be going to government, but to the mining companies. It is important to develop the other sectors of the economy if the economic situation is to improve," he said.



Another auction for the sale of 4.4 million carats is scheduled for September 2010, from which government expects to raise $1.7 billion, but not all industry players support the KPCS recommendation to give Zimbabwe the opportunity to auction the Marange diamond stockpile