I Used to Think… What do you know about diamonds… Where do they come from? How are they formed? Where are they found? What are they worth? Who controls their sale? What part do NGOs play in the diamond industry? Why does the diamond industry change global relationships?

De Beers is a South African diamond company that controlled a majority (80%) of the market in the 1990s Diamonds are formed km below the earth’s surface and transported to the surface in volcanic eruptions Around half the world’s rough diamonds are mined in Africa About US$12 billion of rough diamonds are sold to diamond merchants each year who cut/polish the stones They are then sold to the retail market. The market is worth about US$70 billion each year In the 1990s De Beers sold their diamonds through the Central Selling Organisation (CSO) They convinced other miners to do the same and released diamonds into the market slowly to keep the diamond value up The CSO only sold diamonds for non-negotiable prices 10 times a year in Belgium De Beers started losing control of the market during the 1990s when other diamonds became available from sources such as the Argyle Mine (North West Australia) The Argyle mine produces one-fifth of the world’s rough diamonds New deposits were also found in Canada The break up of the Soviet Union lead to Russian diamonds flooding the market and reducing the value Argyle originally sold it’s diamonds through the CSO but decided to sell directly to the market in 1996 and other miners followed suit De Beers is still the largest distributor but no longer owns the majority of the market financially and also no longer controls how the market operates Conflict diamonds were used by rebel groups to fund the purchase of guns and other equipment Armed groups terrorised local communities to gain control of diamond rich areas Global Witness (a NGO) brought attention to this issue with their report called “A Rough Trade” Governments came under intense pressure to stop the bloodshed During the 1990s it was suspected conflict diamonds made up 4% of the market (some believe between %) As a result of pressure from NGOs a conference was held in Kimberley, South Africa in 2000 with countries who import (USA) and export (Botswana) attending The Kimberley Process Certification Scheme (KPCS) resulted and requires governments to certify diamonds did not come from a conflict area In 2006 Partnership Africa Canada (NGO) published a report that said conflict diamonds were still being smuggled In late 2006 “Blood Diamond” the film was released The movie lead to better worldwide awareness of the conflict diamond issue As a result of the movie and organisations like Global Witness and Amnesty International the KPCS has been strengthened and less then 1% of the world’s diamonds come from conflict regions now If you ever buy a diamond ask the retailer if it is certified conflict-free

Now I Think. What do you know about diamonds… Where do they come from? How are they formed? Where are they found? What are they worth? Who controls their sale? What part do NGOs play in the diamond industry? Why does the diamond industry change global relationships?