Blood Diamond rattles gem trade
2007-01-30 10:34
Johannesburg - "Diamonds are forever", Shirley Bassey once sang, and the diamond industry wants it to stay that way.
The potential threat now was the film Blood Diamond, which had revived controversy over so-called "conflict diamonds" used to fund civil wars in Africa.
Fearing harm to their business - annual sales of nearly 10 billion euros ($12.9bn) for rough diamonds and 14 billion euros for polished ones - the industry's public relations and marketing specialists quickly manned their battle stations.
Because the value of diamonds essentially depended on their image, Johannesburg-based De Beers, the world's leading diamond company, mounted an image campaign together with African partner governments to counter any taint to its reputation from the film.
Two-thirds of diamonds 'produced in Africa'
Sales of conflict diamonds had provided rebels and the money needed for weapons used in bloody civil wars, costing hundreds of thousands of lives, in countries such as Sierra Leone, Liberia, Angola and Congo.
Two-thirds of all diamonds were produced in Africa. Illegal diamond exports had also been used by terrorist groups for money-laundering purposes. The diamond industry responded to the problem several years ago.
Diamond companies, governments and non-governmental organisations, facing global pressure to end the smuggling of rough diamonds used to fund wars, met in 2000 in the diamond-mining town of Kimberley, South Africa, to devise an international diamond certification scheme.
It was launched in 2003. Called the Kimberley Process, the scheme had been endorsed by the United Nations and included 71 participating countries as well as all major diamond mining, processing and trading centres.
End of civil wars
According to De Beers, the certification process covered about 99% of all the diamonds produced. This year, the European Union planned to plug the remaining hole, and to harness the diamond industry more tightly to measures aimed at preventing the sale of conflict stones.
Since the end of civil wars in countries such as Angola and Liberia, the debate over conflict diamonds became less intense. Among the issues today was how diamonds could benefit the development of the countries producing them.
Botswana and Namibia, for example, shared profits with De Beers. Hundreds of thousands of people depended on diamond-mining for their livelihoods.
The number in Nambia, where the first diamond was discovered nearly 100 years ago, was 5 000 workers and their families. The contract between Namibia's government and De Beers was up for renewal.
Diamond-cutting operations
In 2006, Botswana's government extended the licences of De Beers' four diamond mines in the country - which accounted for more than half of the company's business - for another 25 years. In return, Botswana was able to increase its share of De Beers' stock from seven to 15%.
In addition, De Beers agreed to help set up diamond-cutting operations and distribution centres in Botswana, so that precious stones from outside the country could also be prepared for the market.
Botswana, which at 30 million carats annually was the world's biggest producer of diamonds by value, was trying to reduce its dependence on diamonds. To date, its diamond sales had accounted for about 70% of its income.
Formerly the British protectorate of Bechuanaland, Botswana produced a quarter of the world's diamonds and had been seen as a giant economic success story since the first precious stones were discovered there shortly after it gained independence.
Botswana and De Beers had 50/50 stakes in the joint venture, Debswana, the country's largest private employer.
Sapa-dpa
- SAPA