BRUSSELS (Reuters) - The European Union has agreed to lift sanctions on a Zimbabwean diamond-mining firm despite concerns over alleged fraud in a July election that kept President Robert Mugabe in power, the EU said on Tuesday.
EU governments have carried out a review of Zimbabwe Mining Development Corporation's (ZMDC) inclusion in the EU sanctions list "and begun the process of delisting ZMDC," EU foreign affairs spokesman Michael Mann said.
The decision gives a boost to Mugabe, whose ZANU-PF party calls EU sanctions illegal, and will allow the mining firm to sell its diamonds in Europe, potentially raising its revenues.
Belgium, centre of the global diamond trade, had pushed hard for the EU to lift sanctions on ZMDC, in line with an earlier agreement. Britain, Zimbabwe's former colonial power, had resisted the step so as not to be seen to be rewarding Mugabe.
The decision to take ZMDC off the sanctions list must be endorsed by EU foreign ministers. That is expected to be a formality and to happen quickly, an EU diplomat said.
Mugabe overwhelmingly won the July 31 vote but it was denounced as a "huge fraud" by his main rival, Morgan Tsvangirai. The EU expressed "serious concerns" over the alleged irregularities in the election.