* Ceasefire deal last week raised hopes for peace
* Sectarian violence has driven more than 1 million from
* Profiteering warlords will resist efforts at disarmament
* Any peace process will need to provide economic
By Daniel Flynn
NDASSIMA, Central African Republic, July 29 (Reuters) -
T hree young rebels, their AK47s propped against wooden stools in
the afternoon heat, guard the entrance to the giant Ndassima
goldmine carved deep into a forested hilltop in Central African
Sat in a thatched shack at the edge of a muddy shantytown,
the gunmen keep the peace - for a price - among hundreds of
illegal miners who swarm over the steep sides of the glittering
open pit, scratching out a living.
The mine, owned by Canada's Axmin, was overrun by
the mainly Muslim Seleka rebels more than year ago. It now forms
part of an illicit economy driving sectarian conflict in one of
Africa's most unstable countries, despite the presence of
thousands of French and African peacekeepers.
Seleka fighters - many from neighbouring Chad and Sudan -
swept south to topple President Francois Bozize in March last
year. Months of killing and looting provoked vicious reprisals
by Christian militia, known as "anti-balaka", that pushed the
rebels back, splitting the landlocked country of 4.5 million
people into a Muslim north and the Christian south.
"We control the mine. If there is a problem there, we
intervene," said Seleka's local commander Colonel Oumar Garba,
sipping tea outside a villa in Axmin's abandoned compound.
"People don't want the French peacekeepers here because they
know they'll chase them away from the mine."
Axmin suspended activity at the mine in late 2012 after
rebels occupied its camp. The firm says it is monitoring the
situation. CEO Lucy Yan did not respond to requests for comment.
Thousands of people have died and more than a million fled
their homes in Central African Republic amid the violence
between the Muslim Seleka rebels and Christian militia.
Scenes of cannibalism and the dismemberment of Muslims by
Christian mobs in Bangui sowed fears of ethnic cleansing,
prompting France to deploy 2,000 peacekeepers to its former
colony. After tens of thousands of Muslims fled the south, the
United Nations agreed to a 12,000-strong mission from September.
A ceasefire signed last week in the capital of neighbouring
Congo Republic raised hopes of an end to the conflict. But many
fear local warlords on both sides will resist attempts to break
their grip over resources, especially diamond and gold mines.
At Ndassima, 60 km north of Seleka's military headquarters
in the northern town of Bambari, sweat-soaked labourers toil
beneath the gaze of Seleka gunmen to produce some 15 kilos of
gold a month - worth roughly $350,000 on the local market, or
double that in international trade.
Weighing gold on a balance in a hut at the foot of the mine,
Jimmy Adoum says buyers are scarce but some pay their way past
rebel checkpoints to carry gold to Bangui and east to Cameroon.
Further north, diamond fields around Bria and Sam Ouandja
provide revenue for rebels, who extract protection money and
sell diamonds to dealers in Sudan and Chad, experts say. From
there, the gems are trafficked to Antwerp, Dubai or India.
"Commanders on both sides are profiteering from this
conflict. Both the anti-balaka militia and Seleka are involved
in gold and diamonds," Kasper Agger, field researcher for the
Enough Project, a Washington-based think-tank. "If we are going
to make peace, we need to offer them an economic alternative."
"JEALOUSY, NOT RELIGION"
Before Seleka seized power in March last year, Central
African Republic ranked as the world's 12th largest diamond
exporter. Thousands of artisanal miners produced more than
300,000 carats a year from thin alluvial deposits.
Much of the fiercest fighting centred on these deposits,
especially in the west. In the mining town of Boda, nestling in
forests 100 km west of Bangui, the anti-balaka militia have
besieged thousands of Muslims in the market district.
French troops, their armoured personnel carriers aligned on
an escarpment overlooking the town, now keep the two sides
apart. Opposite the Muslim enclave stand ruins of Christian
homes destroyed in fighting after Seleka withdrew in January.
Both sides accuse the other of starting the clashes.
Christians have seized Muslims' mining equipment and cattle from
nearby pastures. Some who venture from the Muslim enclave have
been killed by militia, their bodies dumped in the river.
"If the Muslims stay there 40 years, we'll wait for them. We
want to kill them," said Nicaise Wilikondi, 45, an ex-teacher
who lives in a camp for displaced Christians.
Like elsewhere in Central African Republic, in Boda it was
Muslim middlemen who controlled the diamond trade and reaped its
profits, while most of the poorly paid mine labourers were
Christians, fueling sectarian resentment.
Cherif Dahirou, Boda's main Muslim diamond trader, said the
Christian militia had seized the nearby artisanal pits, but he
refused to leave the town where he has lived for 38 years.
"This isn't about religion: it's jealousy," he said under an
awning in the grounds of his large house in Boda, in the
besieged Muslim enclave. Originally from Chad, he spoke in
Arabic, not the local Sango language: "I know the anti-balaka
commanders, Romeo and Malou: they used to work the mines."
The region west of Bangui is controlled by Christian militia
leader Alfred Yekatom, a veteran soldier known as "Rombhot"
after the movie hard man Rambo, who has profited from several
uprisings. He collects thousands of dollars a week from
roadblocks staffed by his fighters, according to U.N. experts.
In Boda, militia leader Habib Saidou, a former soldier loyal
to Rombhot, said the Muslims would be left in peace provided
that 14 people who controlled the diamond trade - including
Dahirou and Mayor Mahamat Awal - left the town forever.
"Until then, the Muslims have to stay behind the red line.
If they cross over, we're going to kill them."
"EVERYONE IS BUYING"
Since independence from France in 1960, Central African
Republic has lurched between a series of coups and rebellions as
politicians and warlords strove to exploit its resources.
In an attempt to prevent "blood diamonds" from funding this
conflict, the Kimberley Process - a group of 81 countries,
including all the major diamond producers - imposed an export
ban on raw gems from Central African Republic last year.
Local trading houses like Sodiam and Badica are still buying
gems to stockpile until the ban is lifted. The transitional
government of President Catherine Samba Panza is trying to
enforce a "traceability" scheme to show diamonds are not mined
in rebel territory.
But with only a handful of officials in its anti-smuggling
taskforce, her cash-strapped government has little prospect of
curbing the traffic in gemstones.
"Everyone is still buying. Some people take it to Chad, then
it goes to Dubai," said Saliou Issoufa, whose family works in
the trade in Bambari. He said some Seleka leaders were directly
involved in the trade - something corroborated by a U.N. report.
Seleka's two main factions have for years vied to control
the diamond mines in the remote northeast. The Union of
Democratic Forces for Unity (UFDR), made up of fighters from the
Gula tribe, controlled Bria. The Convention of Patriots for
Justice and Peace (CPJP), grouping Runga fighters, seized mines
Yet Roland Marchal, a researcher on the region at Sciences
Po university in Paris, said diamond trafficking was not the
sole motivation for Seleka's creation. It was formed to combat
discrimination against Muslims, who were routinely extorted by
security forces and denied access to schools and hospitals by a
Christian-dominated civil service.
"This conflict is not just about resources," said Marchal.
"If it is then why would we see this debate on nationality and
whether Central Africans can be Muslims?"
FRANCE SEEKS AN EXIT
France, with its military already stretched fighting against
al Qaeda allies in the Sahel, is pushing hard for a peace deal
in Central African Republic so it can cut back its mission.
Yet the Brazzaville talks failed in their objective of
addressing the key questions of disarmament and a roadmap for a
lasting peace, including a power sharing deal.
Prospects for peace have been complicated by the return as
Seleka's leader of hardline former President Michel Djotodia,
whose supporters favour officially dividing the country in two.
His deputy Nourredine Adam, who has returned from Sudan with
hundreds of fighters, was hit with U.N. sanctions this year over
allegations of rights abuses and diamond smuggling.
Many fear the ceasefire is unlikely to hold. With
anti-balaka attacking close to Bambari in recent days, Seleka's
senior military commander General Joseph Zoundeyko has said he
is ignoring the deal: "We did not want partition but it
happened: the Christians drove us out of the south."
In a recent report, think-tank International Crisis Group
called for mines to be occupied by international peacekeepers.
Yet diplomats and Seleka insiders say Djotodia and Adam will
not hand over control: "Bambari and Bria are the financing of
Seleka. They will never let them go," said one senior diplomat.
At the Ndassima mine, bare-chested labourers bristle at the
thought of foreign interference in their business.
"We don't want international forces here. They'll take the
mine from us," said one youth covered in glittering yellow mud
on the lip of mine. "Now, Christians and Muslims live here in
peace. If the French come, there will be violence."
(Reporting by Daniel Flynn; Editing by Peter Graff)