In a decision which will have a huge impact on the diamond sector across the globe, Zimbabwe announced that it will immediately auction a stockpile of more than 4.5 million carats of diamonds that it has been sitting on during the past nine months due to an international ban on trade in gems from the country's controversial Marange fields.

Mines minister Obert Mpofu said the cabinet has approved the immediate disposal of the diamonds believed to be worth more than US$1.7 billion. This will hit the diamond market across the world as the prices are set to crash now. Recently, due to lack of availability diamond prices had gone up. In fact, De Beers, world's largest diamond sellers, had cut down on production and sale of diamonds due to the price crash witnessed during the recession period.

We are finalising the modalities of how to sell the diamonds, with the actual auction scheduled within weeks, Mpofu said in Harare on Wednesday.

Zimbabwe has been sitting on a fortune of 4.5 million carats of stockpiled diamonds after the Kimberley Process that regulates the world diamond trade banned exports of the Marange stones following reports of gross human rights violations and smuggling by soldiers guarding the alluvial mines.

The KP however agreed to allow Zimbabwe to export the Marange diamonds following a meeting held in Russia last week.

The export plan agreed after two days of heated debate allows Zimbabwe to carry out two supervised diamond sales from its existing stockpile between now and September.

A KP review mission that will include the organization's Zimbabwe monitor Abbey Chikane will visit the southern African country to supervise the diamond sales and compile report. The KP will use the report to decide on future exports.