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Gems still vulnerable to conflict slur
David McKay
Posted: Wed, 30 May 2007
[miningmx.com] -- THE world’s diamond industry hailed the ‘Kimberley Process’, a system of certifying the origin of newly mined diamonds, a outright success.
That was in November last year in the fervid period before the launch of ‘Blood Diamond’, a film produced in Hollywood which used as backdrop the civil war in Sierra Leone during the Nineties, a vicious confrontation partly financed by diamond exports.
Now, however, the ‘Kimberley Process’ has come in for some wounding criticism, most notably by Rio Tinto, the world’s third largest diamond producer after De Beers and Alrosa, the Russian firm. Rio Tinto Diamonds believes more needs to be done to protect consumers. Many people remember the trail of blood from the mink coat in the famous TV advert. Might diamonds meet a similar image slur?
“There’s a very significant risk that we’re over-reliant on the Kimberley Process. The
Kimberley Process just won’t do it on its own,” said Keith Johnson, CEO of Rio Tinto Diamonds. He was speaking at a diamond industry conference organised by RBC Capital Markets earlier this month.
There’s also the issue that working conditions in the mines detract from consumer allure for diamonds. “We could wake up to see Angelina Jolie or Nicole Kidman won’t wear diamonds anymore because they’ve seen 12-year olds up to their waste in water,” Johnson said. “The industry is still not significantly focused on the origin of diamonds”.
The World Diamond Council estimated recently that only about 2% of world diamond trade may come from questionable sources. But that’s probably 2% too much. But the problem also extends to the shop floor. This correspondent recently asked a employees in Sandton jeweller if they could verify the origin of a particular stone; they could barely grapple with the question.
Petra Diamonds, an AIM-listed company which is digging for stones
in Angola, believes it may have one solution. It bought private firm, Calibrated Diamonds, in November enabling it to cut and polish its own mined production. In so doing, Petra hopes to introduce transparency which will build “a mine to finger” supply chain, said Adonis Pouroulis Petra chairman. “This is some solution to the provenance issue."
There’s a lot of talk about the potential risk of synthetic
diamonds, particularly as they plug the supply deficit left by naturally mined diamonds. But Charles Wyndham, whose company WWW International Diamond Consultants has marketed stones for mines such as Letseng, said the real threat to the industry is conflict diamonds.
“That is where the risk for diamonds lies. We don’t want to lose the touchy-feely appeal of diamonds. They have emotional appeal. Anything that threatens this must be viewed seriously. Just look at the fur trade. The diamond industry has to be extremely careful.”
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