Report: Zimbabwe to Pay for Iranian Fuel with Diamonds

In a possible deal of the rejected and economically isolated, Zimbabwe has agreed to buy oil from Iran and Libya, paying for it in diamonds and gold. Cash strapped Zimbabwe suffers from a host of economic problems, including runaway inflation.

According to a report in Mineweb, quoting an anonymous source in President Robert Mugabe’s government, “Our government has made a deal with some partners in Iran and Libya for the procurement of oil but this will be in exchange for gold and diamonds."

Mugabe announced a number of times his intention to nationalize the country’s diamond mining. On the other end of the deal, Iran is under increasing international pressure to end its nuclear program, and many countries are limiting their trade with oil-rich Iran.

According to the Mineweb report, Zimbabwe received, and declined, a $200 million German investment offer in mining Marange diamonds. It then formed Minerals and Marketing Corporation of Zimbabwe (MMCZ) to mine Marange.