Harare - A South African-linked company mining diamonds in the controversial Chiadzwa diamond fields in eastern Zimbabwe came under scathing scrutiny from members of parliament (MPs) on Monday, and was accused of operating above the law.

Mbada Diamonds was stopped last month from holding its first sale of diamonds after the government realised it would openly violate conditions set by the Kimberley Process (KP), the international body set up to stop the spread of blood diamonds being used to prolong conflict in war zones.

The company is jointly owned by major Johannesburg-based scrap metal dealer Reclam, and the near-bankrupt state-owned Zimbabwe Mining Development Corporation.

The diamonds are produced from the hugely prolific Chiadzwa fields, regarded as the world's biggest diamond find in more than a century, with a potential output of at least $70-million a month.

Mbada and another South African-linked company started operating at Chiadzwa in September last year, around the time that a KP meeting agreed not to expel Zimbabwe from the organisation but set down operating conditions to be met before it could export any diamonds.

A parliamentary committee on mining heard Monday from Masumba Chandavengerwa, marketing manager of the state-owned Minerals Marketing Corporation of Zimbabwe MMCZ that his company, the KP, the Mines Ministry and the police minerals unit were taken by surprise when Mbada announced on January 7 plans to auction 300 000 carats.

He said the move did not adhere to conditions laid down by KP that a monitor appointed by the organisation had to be in place in Zimbabwe to validate the origin and legality of diamonds before they could be exported. No KP monitor was present here, he said.

Chandavengerwa said senior MMCZ executives turned up to check on the stones to be sold at a fortified hangar at Harare international airport run by Mbada, but the MMCZ had no idea how many diamonds were being airlifted by Mbada from Chiadzwa to its Harare hangar.

He also said that the MMCZ had a marketing agreement with nearly all mineral producers here, including Zimbabwe' two other mining companies, Rio Tinto-owned Murowa Diamonds and River Ranch, but none with Mbada. - Sapa-dpa