Archive for February, 2009

How To Avoid Purchasing Conflict Diamonds

by Admin on February 25th, 2009

First and foremost, as a purchaser of diamonds, it is important that you are aware of the source of the diamonds you purchase. Asking your jeweler, or rather demanding to know this information, can help assure that diamonds are no longer used to fund death and destruction. The certification used in the Kimberley Process Certification Scheme will allow the jeweler who deals in diamonds to show their prospective clientele that they sell only legitimate diamonds.

The Kimberley Process is a voluntary system that places stringent guidelines on its participants, who account for 99.8% of the world’s diamond producers. There are 45 countries that are participants in the Kimberley Process, assuring the world’s diamond trade stays out of the conflict business, and that the proceeds from the sale of diamonds are not used to fund conflict and war.

Another group that is dedicating its time and efforts to stopping the illicit trafficking in conflict diamonds is Amnesty International. The Clean Diamond Trade Act which passed the United States Congress in 2003 followed the precepts of the Kimberley Process.

The conflict diamond issue is not an issue belonging to the other side of the world. It is one that touches the life of Americans. It is the consumer that ultimately will put a stop to this problem, and in order to do so, they must be aware of the laws and the Certification process, and insist that the jewelers that they deal with are in compliance. They must be careful to make sure that all transactions relating to diamonds are done with reputable jewelers. If your jeweler can not certify that a diamond you are considering is not a conflict diamond, it is time to take your business elsewhere.

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Conflict Diamond - Then and Now

by Admin on February 25th, 2009

There has been a lot of attention paid to conflict diamonds in the recent past. While conflict diamonds have been a very big concern to the diamond industry, today 99% of the world’s diamonds are conflict free. The media tends to focus on the negative aspects of the diamond industry and it rarely brings to light some of the good that is occurring today because of diamonds.

The fact is that because conflict diamonds have been virtually eliminated, the opportunity for diamonds to do a lot of good has increased. First, diamonds allow many people around the world access to health care. The revenue from the sale of diamonds has been used to build hospitals, clinics and hospices in areas where these services simply did not exist before. Diamond companies are also proactive in assisting their employees with their health needs. The diamond industry has been a leader in providing access to HIV testing and treatment for their employees.

In Botswana, where diamonds were discovered in 1966, the increase in the number of public schools can be contributed directly to the revenue from the diamond industry. School buildings have been built and access to books and other educational materials has increased. The goal is to increase the literacy rate which will have an impact on the health of Botswana’s economy.

India has long suffered from poor economic conditions in many of its rural areas. In recent years, there has been a tremendous growth in the diamond industry. There are now over one million Indians employed in the diamond industry. Nine out of every 10 diamonds in the world are polished in India. Not only has this helped the individual workers, but it has been instrumental in increasing the gross domestic product of India.

Although there was a period of time where diamonds were used to fund conflict, today revenue from diamonds is increasing the quality of life for people around the world.

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War crimes court to rule on ‘blood diamond’ rebels

by Admin on February 24th, 2009

Sierra Leone’s war crimes tribunal will hand down a verdict Wednesday against three rebel RUF commanders accused of carrying out a spree of killings, rapes and mutilations fueled by “blood diamonds.”

The verdict is eagerly awaited by the victims, who still bear the psychological and physical scars of the rebels’ atrocities.

“My expectation is to see justice done,” 25-year-old Isatu Sillah, who was gang raped by teenage RUF fighters in 2001, told AFP.

The three senior commanders of the Revolutionary United Front (RUF), Issa Sesay, Morris Kallon and Augustine Gbao, face 18 counts of war crimes and crimes against humanity.

The accusations include murder, rape, sexual enslavement, cruel treatment, using child soldiers and attacks on UN soldiers during Sierra Leone’s 1991-2001 civil war.

By the time the conflict ended, some 120,000 people were killed while tens of thousands were mutilated, their arms, legs, noses or ears cut off.

The three men have denied the charges against them.

On Wednesday the court will only rule on whether the suspects are guilty or not. The sentences, if guilt is found, will be issued at separate hearings.

Sesay, Kallon and Gbao were among the “most senior members of the RUF” and involved in a joint criminal enterprise with former Liberian president Charles Taylor to control the diamond fields of Sierra Leone to finance their warfare, according to prosecutors.

RUF rebels terrorised the civilian population of Sierra Leone. They killed and raped at will and forced people to work in the RUF-controlled diamond fields.

During the trial the 75 witnesses presented by the prosecution told harrowing tales of atrocities.

One witness recalled how he and his children were forced to watch how his wife was first gang raped by eight rebel soldiers before being killed. Another witness said he saw rebels force a young boy to have sex with a woman.

When he was unable to perform rebels “started slashing this fellow’s private (parts) and slitting the lady’s privates so this lady would not meet with any other individual in her life”, he told the judges.

Another tactic favoured by the rebels was amputating hands and arms or carving the initials RUF into the bodies of their victims.

The RUF was notorious for using so-called Small Boys Units, boys forcibly recruited and issued with AK-47’s. The child soldiers had a reputation of particular cruelty among the civilian population.

The three RUF leaders were initially indicted along with the RUF’s founder and close Taylor ally Foday Sankoh, who died in custody before the case ever came to trial.

Charles Taylor is currently on trial in a separate case before the Special Court for Sierra Leone, sitting in The Hague for those proceedings. He faces 11 counts of war crimes and crimes against humanity.

Sesay, 38, Kallon, 45, and 60-year-old Gbao went on trial in june 2004. Their defence says they are not responsible for the atrocities.

Sesay’s lawyers have tried to cast him as a peacemaker because he signed the Lome peace agreement which ended the war.

Kallon and Gbao have both attacked the prosecution case and witnesses saying there was no evidence they were directly involved in atrocities.

Human rights organisations in Sierra Leone stressed the importance of a balanced verdict in the case.

“We expect a fair judgment (and) for the RUF to be treated fairly. The verdict should be beyond all reasonable doubt,” said Charles Mambu of the Coalition of Civil Society and Human Rights.

The RUF case is the last of the three special court trials held in Freetown. The only trial still ongoing before the Sierra Leone tribunal is Taylor’s case, which was moved to The Hague for security reasons.

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De Beers Mothballs Mines in Botswana

by Admin on February 24th, 2009

De Beers has suspended mining operations on four mines in Botswana because of a reduction in diamond demand, the Financial Times reports

The mines, source of half of the group’s supply of rough diamonds and nearly a quarter of the world’s by value, sold no diamonds in November and “very little” in the subsequent two months, Sheila Khama, chief executive of De Beers’ Botswana business, told the U.K. business publication.

The four mines that make up the Debswana Diamond Company (a joint venture between De Beers and the government of Botswana) have been out of operation since the start of the year, Khama told the newspaper. The mines include Jwaneng, the world’s richest by value, and Orapa, the biggest by volume.

The home page of the Debswana Web site reads that “it is unavailable due to maintenance.”

Khama could not say when production would return but estimated that diamond demand may not return until 2010, according to the newspaper.

Global sales of diamonds have fallen to a standstill, the newspaper reports, primarily because the U.S., which normally consumes as much of half of any year’s diamonds, is in recession. Diamond cutters are weighed down with debt and stock they cannot move to retailers.

The mines, the country’s largest private-sector employer, had not yet cut its 6,300 work force, the newspaper reports. However, workers at Botswana’s downstream operations had had their hours cut.

The southern African country of 1.8 million people depends on diamonds for four-fifths of the foreign exchange it earns and about a third of gross domestic product, the newspaper reports.

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De Beers Borrows $500 Million and Temporarily Closes Mines

by Admin on February 24th, 2009

De Beers, the World’s largest diamond company, is taking several steps to withstand the economic recession that is now affecting the diamond industry as well. First, De Beers will borrow $50 million from Anglo American PLC and other shareholders to “withstand any shocks” after diamond and gem demand worldwide has fallen more than 50 percent. Also, Debswana Diamond Co., a joint venture between De Beers and Botswana that produces almost one-fifth of the world’s diamonds, will shut down all of its mines until at least April 14, as the market is already flooded with diamonds and other gems. The company also plans to cut 580 jobs and try to deploy those workers elsewhere in the company.
Brock Salier, a mining analyst at Ambrian Partners Ltd London said via email that “This is a major chunk of worldwide production. Although bad news for the Botswana economy, we expect that this will stabilize the supply demand balance.” The closures of the mines are being done to help offset the effects of the decrease in demand for expensive diamonds and gems by reducing production in an already-flooded market.

New York-based Tiffany & Co., the world’s second largest high-end jewellery retailer said that holiday sales declined 21 percent from 2008. Switzerland’s Cie. Financiere Richemont SA, makers of Van Cleef & Arpels jewellery, said in January that this is the toughest market they have faced in 20 years. Luxury jewelers will certainly bear the brunt of this crisis, as Americans—expected to purchase 22% less in the next year—look to other less expensive but high-quality jewelers to make their diamond jewelry purchases.

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Botswana: Crisis Opens a Window of Opportunities

by Admin on February 17th, 2009

A few hours at the 2009 Mining Indaba conference in Cape Town was sufficient to hear enough De Beers-related gossip to keep any investigative journalist busy for months researching whether or not there is fire burning under all the smoke. Here is just a taste of the rumor mill: word has it that a parcel of 10 percent of De Beers is “on the market;” that the Botswana government is contemplating an increase in ownership in the Debswana mining company from 50 percent to 80 percent; that Chairman Nicky Oppenheimer’s family company struggled to find $300 million to cover a debt maturation that the Dresdner Bank refused to roll-over; that De Beers wants Namibia’s Namdeb overdraft of N$650 million to be paid immediately in equal parts by the shareholders and that De Beers’ mother company, De Beers Investments, needs to roll-over debts in excess of $1.2 billion in March – and may have problems doing so.

These are examples of, what I would call, “the lighter chatter” I heard at the mining conference. The heavier chatter I also heard comprises whispers that De Beers might be in violation of its contractual arrangements with Botswana and that the British VAT and Tax Revenue authorities are having “issues” with De Beers. Don’t be overly alarmed – De Beers is really not singled out. What financial institutions said about Gem Diamonds’ Clifford Elphick is not even printable.

The 4,000 participants at Indaba, most of whom paid a $1,300 entrance fee just to be able to be there and to be seen, were generating mountains of verbiage. Rumor and hearsay among serious and well-connected industry players were surely the hottest commodities at Africa’s largest annual mining event. The active participation of 15 ministers of mining and minerals added an additional dimension to the information flow.

De Beers and Botswana

By far the most intriguing speculation I heard centers on the relationship between De Beers and the Botswana government. In the present global credit crunch, the Botswana government has something that has become very rare in the diamond pipeline: money and plenty of it (though its foreign reserves have taken a hit). What is good about Botswana’s privileged position is that its government is willing to use the accumulated diamond wealth to support the diamond business as a way to survive the crisis period relatively unscathed. It isn’t clear, however, how this will play out.

During a short visit to Gaborone this week, I learnt that the staff at DTC Botswana has agreed to take a 20 percent pay cut and shifted to a four-day workweek that finishes every day at 2.30 pm. The two football field-sized sorting rooms, created to sort well over 50 million carats a year, processed “only” 30 million carats in 2008. The DTC Botswana building is undoubtedly one of Africa’s most beautiful and impressive architectural landmarks, exuding transparency, openness, equality and immense pride in the diamond product. It is almost a piece of art with many decorative internal water pools and artwork with unique reflections of light anywhere one looks. The magnificent of the building doesn’t distract, however, from the gloom felt (and highlighted by local press) about the nation’s diamond future.

Two of the country’s mines are closed for the entire year and the unions are still negotiating the plight of the workers. This is an explosive subject, especially since it is an election year in Botswana. Diamonds are the nation’s single largest revenue source and export segment. Batswana will have their word at the voting booth. Their government is expected to act.

On the beneficiation side, out of the 16 diamond cutting plants, one has closed and another one has extended the summer vacation by another month. Almost all have retrenched workers. Many have opted for a shorter workweek. The government knows, as we all do, that the global financial crisis will be temporary but severe. Also, when the market sentiments shift for the better, mines will be the first to prosper again.

DTC Botswana Managing Director Brian MacDonald confirms that last year’s target of $360 million worth of rough sales to domestic industry has been met. The target for 2009 is $550 million. The contractually agreed beneficiation employment threshold is 3,300 workers; this must be met otherwise De Beers will have to pay a penalty. The agreement between De Beers and the government regarding beneficiation contains a force majeure clause in respect to unforeseen changes in the world economic conditions. Surely, the targets for 2009 will need to be renegotiated.

A Greater Stake in Debswana for Botswana?

Debswana has already decided to reduce output by some 25 percent in 2009, though that figure may have to be revised upwards through the year. Assuming a 20 percent-25 percent decline in rough diamond prices, Botswana potentially faces a revenue fall of 50 percent, i.e. $1.6-$1.7 billion, though it might be more. A little-publicized provision in the sales contract between Debswana and De Beers states that DTC International can “request” that Debswana retains in inventory such (categories of) diamonds for which there is a short-term reduction in demand.

Although there are presently no formal production quotas as were used in the cartel days, clearly De Beers continues to have the tools in place to have Debswana revert to the inventory stockpiling measures of the past. There is a difference, however. In any event, diamonds first need to be sorted and valued by DTC Botswana. But instead of being subsequently sold to DTC International, they go back to Debswana, which sounds awfully familiar. It also means the fall in revenues becomes quite unpredictable.

The reduction in diamond output has far-reaching ramifications. Botswana’s GDP will be negatively impacted and will push the nation into a recession, i.e. into negative growth. Analysts tend to look at an economy’s growth figures – the reason for reduced growth is less relevant. This decline in GDP may, in turn, result in a downgrading of Botswana’s sovereign credit ratings. This must come as a blow to the nation.

Clearly, in spite of the considerable retrenchments, cost-cutting measures and postponements of expenditures, Debswana cannot reduce expenses enough to match the lost revenues. A back-of-the-envelope exercise indicates that Debswana will need a capital injection of $1.2 billion.

One cannot simply inject cash into Botswana; this would ruin the country’s budget and force it into widening its budget deficits. From a Debswana perspective, taking on more loans would only increase its debt burden, which would also seriously impact its financial standing in the market.

So how will it be done? One influential financial expert, who has the ear of President Ian Khama, observed that the government cannot just give money. It needs to get some assets in return. What could these assets be? Possibly a greater stake in Debswana.

This reasoning is fueling the rumors that the government will want to increase its shareholding in Debswana. This would inject cash into the coffers of De Beers and De Beers Investments, the highly indebted holding company of the diamond mining group. From a Botswana perspective, this would cushion the fall in revenues, as it would collect a greater part of the annual Debswana dividend.

What I find puzzling is why there is so much talk about increasing the government’s share to 80 percent and not 100 percent. The latter option would make the most sense, at least from a Botswana government perspective.

Botswana Lost Attraction for De Beers?

Historically, Botswana was the greatest revenue earner for De Beers. The country used to host the world’s lowest-cost mines. Gradually, however, the government’s share of pre-tax earnings has climbed to 80 percent-82 percent. In the less transparent days of De Beers, the company’s de facto control of valuations, export pricing, selling assortments, etc. enabled it to cream off some 30 percent (maybe more) from the top. The highest echelons of the Botswana government were aware of this but accepted it anyway, as it still got a very good deal. This is no longer the case.

With diamond sorting, valuations and aggregation moving to Botswana, the mining business has become fully transparent, fully accountable, with the various functions carried out with unprecedented corporate integrity. This should be a source of great pride and satisfaction to the current management of De Beers.

Ironically, almost sadly, this has made Botswana a far less exciting and interesting place for De Beers from a revenue perspective. And it will only get worse. This is not only because Botswana’s diamond resources are depleting and costs rising, but also because tens of millions of carats in the years ahead will come from reprocessing tailings. The value of these goods will be much lower than the current average values.

There may be advantages for De Beers in having a chance to “walk away.” Currently, the Debswana production is valued and then sold at 90 percent of the so-called Standard Selling Values to the Botswana DTC. The latter will do the sorting and then sell the entire output at 95 percent to DTC International, which then sells to its worldwide Sightholders, including the Botswana Sightholders.

Technically, the Sightholders in Botswana get their allocations from DTC Botswana – it may not be realized that in this function, the DTC Botswana merely acts as “agents” for DTC International. This structure still allows a nice margin to De Beers/DTC International.

The Botswana government has learned how to negotiate. Formally speaking, DTC Botswana is a joint venture between the DTC and De Beers on one side and the government of Botswana and the DTC Botswana (Propietary) Ltd. on the other side. It is a 50/50 joint venture, but the construction and equipping (!) of the DTC Botswana building, which was fully paid for by De Beers, including the purchase of the land, was solely for the account of De Beers – even though the building is owned by joined venture partners.

For the government of Botswana to have 80 percent of Debswana would still allow for the operations of all the sorting, valuations and aggregation functions of the De Beers Group. It would also leave intact the Debswana obligation to sell ONLY to Botswana DTC, and the latter will sell only to DTC International (and to Sightholders on behalf of DTC International). If Debswana were 100 percent in the hands of the government of Botswana, it is unlikely that De Beers would continue to avail itself of all these structures.

There are some interested parties that would like Debswana to become more like BHP Billiton with a marketing model consisting both of auctions and contractual sales (with prices adjusted in accordance with auction results). Those advocates would have an interest in Debswana gaining the flexibility of setting its own marketing structures.

There are alternatives. Botswana could also increase its 15 percent stake in De Beers Investments to 25 percent or more, and thus invest at a higher level. The financial pressures on the Oppenheimer Family’s Central Holdings, on De Beers Investments and even on Anglo American may well see the transfer of funds from the “haves” (Botswana) to the “haves-less;” this, of course, is all relatively speaking.

Brian MacDonald, who happens to be the oldest (tenure-wise) executive of De Beers, rejects these rumors as totally baseless. We respect his view – but would invite him to reread this column six months from now.

Infringement of Contract

Another hot topic from all the Indaba gossip is the issue of contract infringement. This, I found out, is related to the delay in moving the “aggregation function” (i.e. the mixing of all the various De Beers mining output into selling assortments) from London to Gaborone.

It had been assumed that the decision to postpone moving the aggregation function to Botswana was because De Beers wasn’t convinced that those being trained to do the aggregation were ready to take on the challenge. However, while in Botswana, it was confirmed to me that the real cause for the delay was a disagreement with the tax and VAT authorities. Initially, I naively construed this as being a matter between De Beers and DTC Botswana that could be easily fixed. However, I soon discovered that the dispute holding up aggregation in Botswana is actually between De Beers and the tax authorities in London.

For years, the DTC’s tax payments in London were based on an assumed profit of 2 percent of DTC turnover. If the DTC’s main activities move away from London, this is bound to impact the taxation arrangements between DTC International and Her Majesty’s tax department. Apparently, the latter is now learning of the new arrangements and is studying their ramifications. De Beers spokeswoman Lynette Gould says De Beers has “identified a small number of issues that we believe are ‘right for success’ and that need to be resolved before aggregation can move to Botswana.” She is hopeful it will happen in 2009.

Thus, it is clear that the delay in moving aggregation to Botswana is, technically, an infringement of the agreements between the parties. My sources didn’t want to speculate as to how much patience President Khama will have in this matter.

Smoke with Merit

To return to my opening idiom, of whether or not the “smoke” at Indaba was fueled by real fires, we certainly believe it is “quite hot there under the smoke,” and the real issues associated with the chatter and gossip are serious.

Clearly, the global financial crisis is impacting Botswana. However, people I talked to view all these issues as challenges and opportunities rather than as problems. Botswana always had the diamonds; now they have diamonds and money. The country’s government will have to explore how the required “rescue money” can be applied in a manner that best serves the Botswana economy at large.

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What is a Blood Diamond? What are Conflict Diamonds?

by Admin on February 5th, 2009

Accounting for almost half the world’s production of diamonds, Africa is the richest continent when it comes to mining diamonds. The largest diamond mines are located in the south between the Orange and Vaal rivers, with lesser diamond bearing kimberlite deposits across the west–central part of Africa. The first diamond deposits found in Africa were alluvial. Alluvial diamond deposits are controlled by the surrounding topography. Alluvial diamond deposits are usually located within river gravels that have been transported from their location of origin. South African diamonds were first stumbled upon in the winter of 1866, when a 15 year old boy found a transparent rock on the sandy south bank of the Orange River. By 1869 diamonds were found far from the river banks in hard blue rocks later called kimberlite after the diamond mining town of Kimberley. In the following 15 years South Africa produced more diamonds than India yielded in last 2,000 years of diamond mining. This abundance of diamonds pouring out of Africa coincided with the exhausting of Brazilian diamond deposits which had once out produced the European diamond demand a century earlier when they were discovered in the 1730s. The growing American wealth from the Industrial revolution in the United States during the late 1800s kept the diamond demand up with the South African supply.

People have been dying over diamonds for the thousands of years. From Aladdin’s conquest of Malwah to capture the “Koh i noor” diamond in the 1300s to the present day Taliban trading of Afghan Emeralds and Rubies for guns and bombs, warlords and terrorists alike have used gemstones to further their cause. Conflict or War diamonds are diamonds that are sold to fund the unlawful and illegal operations of rebel, military and terrorist groups. They are also called blood diamonds because the citizens that are forced to mine them are terrorized, mutilated or killed by those in control of the local diamond trade. Blood diamonds have helped fund devastating civil wars in Africa, costing the lives of an estimated 3.7 million. The countries most affected by conflict diamonds are Sierra Leone, Angola, Liberia and the Democratic Republic of Congo. Once a rough diamond is brought to market, its country of origin is difficult to trace. Once cut and polished, a diamond’s source can no longer be identified. Profits from the trade in blood diamonds, worth billions of dollars, were used by warlords and rebels to buy arms during the devastating civil wars in Angola, the Democratic Republic of Congo (DRC) and Sierra Leone.

Blood diamonds are uncut rough diamonds sold to fund armed conflict and civil war. In the 1990s, up to 4% of the world’s rough diamonds were being used by rebel groups such as Unita in Angola and the brutal Revolutionary United Front (R.U.F) in Sierra Leone. Rough diamonds are the accepted currency to purchase weapons from arms dealers and become conflict diamonds when they sustain bloody civil wars. As a result the term “blood diamonds” was born. International nongovernmental organizations (NGOs) also discovered that rebel groups in the Democratic Republic of Congo and the notorious government of Charles Taylor in Liberia were dealing in blood diamonds.

Hollywood released the film “Blood Diamond” starring Leonardo DiCaprio, Djimon Hounsou and Jennifer Connelly, highlighting the role of blood diamonds in Sierra Leone and recently, rapper Kanye West raised the issue of conflict “blood” diamonds in his music video “Diamonds” (featuring Jay–Z). In the song, West voices his own inner conflict with blood diamonds: In his video West takes you into dimly lit diamond mines, where under horrible conditions children are forced to mine for “small bits of primeval carbon” that have no use whatsoever to the average Sierra Leonean child who would rather have peace, food, and shelter. And if the enslaved child tries to steal a diamond they lose their hands to the R.U.F rebel’s dull machete; when the innocent children try to run away and the rebels will “hobble” their ankles like what happened to Novelist Paul Sheldon in Stephen King’s Misery, crippling the child for life. This spilt innocence blood is the way the term blood diamond came to be. Hollywood’s movies like “Lord of War” starring Nicholas Cage, “Blood Diamond” and Kayne West’s song and video about “blood diamonds” help raise the level of international awareness concerning blood diamonds. While the wars in Angola and Sierra Leone are now over and fighting in the DRC has decreased, the problem of conflict diamonds hasn’t gone away. Diamonds mined in rebel–held areas in Côte d’Ivoire, a West African country in the midst of a chaotic conflict, are reaching the international diamond market. Conflict diamonds from Liberia are still being smuggled into neighboring countries and exported as part of the legitimate diamond trade.

In 1992, the Revolutionary United Front (R.U.F.), a ruthless rebel group seized the diamond mining capital of Sierra Leone. The Liberian warlord, Charles Taylor, not only participated in the illicit diamond trade, he acted as mentor, trainer, banker and weapons supplier for the R.U.F., Charles Taylor used R.U.F. rebels to integrate a substantial amount of illicit blood diamonds (valued in the millions) into the global diamond trade, and then used the profits from the conflict diamonds to purchase weapons, which reinforced the R.U.F.’s military strength. Taylor, who later became President of Liberia, was a formidable force behind R.U.F. rebels’ reign of terror in Sierra Leone. This is a perfect example of how a blood diamond enables warlords to finance a conflict using the profits from illegal conflict diamond sales

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What you can do to Avoid Buying a Conflict Diamond.

by Admin on February 5th, 2009

As a consumer you can avoid buying a blood diamond in a couple of ways. First buy a vintage cut diamond, if the diamond was mined and cut over 50 years ago there is no way for it to be a current conflict diamond. If you choose a modern cut diamond require proof from the retailer that you are buying your diamond from that the diamond is conflict–free. The proof can be as simple as a guarantee statement on the back of the invoice from the diamond supplier. The second way to steer clear of blood diamonds is to buy diamonds that are mined from continents that do not have civil wars going on. Canadian mined diamonds and Australian mined diamonds are conflict free. The jeweler must be able to answer that their diamonds have passed through the Kimberley process. Most retailers cannot absolutely guarantee the diamond you purchase is not a conflict diamond. As consumers, we have the power to change that over time by demanding details about the origin of the diamonds we buy. Demanding proof that a diamond is conflict–free sends a powerful message to the jewelry world that we will not support an industry or nation that helps fund terror groups. The only 100% guaranteed way to insure your diamond is conflict-free is to buy a lab created diamond. Conflict–Free diamonds are yet another way to emphasize that the partnership of marriage is rooted in deeply held conviction. Diamond wedding rings, a symbol of lasting commitment, need not support appalling violence and human rights abuses.

Canadian mined Diamonds are conflict–free.
Canada has made progress in identifying diamonds originating in its mines. The Voluntary Code of Conduct for Authenticating Canadian Diamond Claims sets the standard for authentication of a diamond that is Canadian. The Code requires tracking a diamond’s progression from the mine to its retail destination. This includes requirements for proper handling, packing and laser inscribing of all diamonds that are represented as Canadian diamonds. The Canadian program is voluntary, so not all retailers participate. So there’s no way to absolutely guarantee a diamond is Canadian, but the process definitely helps eliminate doubt..

Australian mined Diamonds are conflict–free.
Diamonds that are mined and cut in Australia conflict free diamonds and Australian diamond prices are quite low compared to other countries, European countries especially. The currency exchange rate artificially makes the price seem high but your buying power is increased so this makes diamonds in Australia well priced. Australia would have to be the cheapest for diamonds of fancy colors. Australian Argyle Diamonds are internationally renowned for their unique brilliance and stunning array of colors. Unearthed in the rugged region to the far north of Western Australia, Argyle Diamonds thrill in shades of exotic pink, sparkling champagne, rich cognac and dazzling white. The Argyle Diamond Mine is the world’s biggest producer of natural fancy color diamonds and contributes approximately one–third of the world’s natural diamond supply.

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What is being done to stop the sale of blood diamonds?

by Admin on February 5th, 2009

In 2000, a Non–Governmental Organization’s report showed that the underground trade of illicit blood diamonds was booming. Conflict diamonds were valued between 4 percent and 15 percent of the world’s total diamond market, which generated annual conflict diamond trade revenues of $7.5 billion. The response from the governments, the UN and the diamond industry was swift and decisive. Following international concern at the role played by the illicit conflict diamond trade in fuelling conflict in Sierra Leone, the United Nations Security Council adopted resolution 1306 on 5 July 2000 imposing a ban on the direct or indirect import of rough diamonds from Sierra Leone not controlled by the Government of Sierra Leone through a Certificate of Origin regime. An arms embargo and selective travel ban on non–governmental forces were already in effect under resolution 1171 of 5 June 1998. Compared to the murderous rampage of R.U.F. rebels, U.N. sanctions appear lenient.

10 years after the war began; the United Nations finally intervened in Sierra Leone in June 2001. As a result of their delay, thousands of Sierra Leonean children were killed and mutilated because there was no large scale, international intervention in the early stages of the conflict. The horrific atrocities in Sierra Leone and the long suffering of the people of Angola have heightened the international community’s awareness. But U.N. efforts alone won’t stop the senseless killing in Sierra Leone and Angola over illicit blood diamonds. In the distant future NGOs may go so far as to urge the public to boycott African mined diamonds all together.

The publicity of this blood diamond report forced the diamond industry to form the World Diamond Congress to formulate its collective response, and national governments around the world drafted legislation to outlaw and criminalize the any trade in “conflict diamonds”. Then with the help of the South African government a trilateral forum between national governments, the diamond industry and NGOs met in Kimberley in May 2000, out of which emerged the Kimberley Process. The World Diamond Congress, in Antwerp, on the 19th July 2000, agreed on a resolution to prevent the illegal trade in blood diamonds for financing armed conflicts and crimes against humanity.. Their efforts resulted in The Kimberley Process Certification Scheme (KPCS), an international effort to rid the world of conflict diamonds. Participation is voluntary but it is supported by countries producing more than 99% of the world’s diamonds. The Kimberly Process is an agreement between national governments, NGOs and the diamond industry to tackle the problem of rough diamond trade fuelling conflicts in countries such as Angola, the Democratic Republic of Congo, Sierra Leone and Côte d’Ivoire.

In January 2003, the Kimberley Process Certification Scheme was launched which requires governments to pass legislation and put systems in place to control the import and export of rough diamonds. The goals of the Kimberley Process are to document and track all rough diamonds entering a participating country, with shippers placing diamond rough in tamper–proof shipping crates and providing enough detailed information about their origins to prove they did not originate in a conflict zone. The Kimberley Process Certification Scheme (KPCS) imposes requirements on participants to certify that shipments of rough diamonds are conflict–free. South African countries with a legitimate diamond trade began a campaign to track the origins of all rough diamonds, attempting to halt the sales of blood diamonds from conflict areas. For South Africa, the world’s fifth–largest diamond producer, the success of KPCS, as an effective solution to the problem of conflict diamonds was critical. The launching of the Kimberly Process at the initiative of African diamond–producing countries was a great start to stopping blood diamonds from getting to market.

Today, the Kimberley Process can claim with confidence that trade in conflict diamonds, or those with questionable provenance, has been reduced to some 0.2% of the total global market. When fully implemented the diamond industry will have the ability to block blood diamonds from ever reaching the global market. The Kimberley Process has evolved into a global certification scheme founded on national legislation, and is effectively eradicating trade in rough diamonds that did not carry a government–issued certificate of origin warranting that the diamond was not mined or traded in an area of conflict. All available data shows an “overwhelming proportion” of rough trade in diamonds was taking place through the KPCS and the scheme was an important in preventing renewed conflict in Sierra Leone and the CongoIn the United States, the KPCS is enforced by the Clean Diamond Trade Act, introduced in 2003, which requires annual reviews of the standards, practices and procedures of any entity in the US that issues KP certificates for the export of rough diamonds. Another report by the U.S. Government Accountability Office found that conflict diamonds could be entering the U.S. because of weak enforcement of the law.

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Archive for February, 2009

How To Avoid Purchasing Conflict Diamonds

by Admin on February 25th, 2009

Conflict Diamond - Then and Now

by Admin on February 25th, 2009

War crimes court to rule on ‘blood diamond’ rebels

by Admin on February 24th, 2009

De Beers Mothballs Mines in Botswana

by Admin on February 24th, 2009

De Beers Borrows $500 Million and Temporarily Closes Mines

by Admin on February 24th, 2009

Botswana: Crisis Opens a Window of Opportunities

by Admin on February 17th, 2009

What is a Blood Diamond? What are Conflict Diamonds?

by Admin on February 5th, 2009

What you can do to Avoid Buying a Conflict Diamond.

by Admin on February 5th, 2009

What is being done to stop the sale of blood diamonds?

by Admin on February 5th, 2009