Africa: Why Continent Bleeds Diamond Revenues

Africa holds mineral wealth with diverse commodities that are sought after the world over. In the diamond industry, revenues elude local communities despite multilateral certification measures.

In diamond-rich parts of Africa, the revenue generated from mineral extraction does little to improve of the quality of life of the people who live in those countries, with Botswana being the only exception. Instead of uplifting communities through mineral riches, many people find themselves stuck in a vicious cycle of exploitation and abuse.

DW asked diamond industry insiders and experts why the extraction of the gemstones fails to result in local socio-economic benefits in other African countries.

Benefitting from division

In the Democratic Republic of Congo (DRC), says African Diamond Council President Dr M’Zee Fula Ngenge, there’s a history of conflict brought about by “pervasive greed, postcolonial secessionism, as well as a customary erosion of public sector accountability and government management.”

Ngenge believes that only a select few get to directly benefit from the hard labor of miners, keeping the workers barely surviving in order to continue exerting power over them. Regional conflicts not only add to this mix of control and illicit oppression but actually benefit the big names in the diamond trade, allowing them to set the going rate for labor according to how desperate miners are to make money.

This scenario of conflict in the DRC is similar in other African countries with large mineral riches as well, says Ngenge, highlighting that many nations in the region are “deliberately targeted (by the diamond industry) for their political and social instability.”

“All the countries surrounding the DRC are at risk of being destabilized, resulting from a concentrated aim or focus to extract, abuse and defraud.”

Illegal diamond mining

What Congo, Angola, Mozambique and many other mineral-rich countries in Africa have in common is the fact that there are two markets for the exploitation of mineral resources: there is a formal extractive industry, which is subject to at least some level of oversight, and a clandestine one, which is dominated by miners and their sponsors.

To understand how the clandestine market for producing and trading diamonds operates, DW visited the diamond-mining town of Cafunfo in Angola’s Lunda Norte province, located on the border with the DRC.

Caiongo Adelino has been an informal miner — or garimpeiro — for over 10 years. The 49-year-old says that as a general rule, groups of garimpeiros have sponsors who pay for their trips deep into the bush to extract diamonds illegally and later, these sponsors buy the diamonds off them.

“The last time I sold a diamond it cost $1,250,” Adelino told DW. “But these are not real prices, because the table that is used for us garimpeiros is one, and the market where they sell the diamonds is another.”

The clandestine market for buying and selling the precious stones — particularly diamonds mined by the garimpeiro — is largely dominated by foreigners: Senegalese, Chinese, French, Eritreans, Guineans and Congolese intermediaries, who are not invested in the upliftment of the local communities.

This is even reflected in their business model: A sponsor distributes essential goods to the garimpeiros for their subsistence in the bush, after which the value of the goods distributed is deducted from the cut that is due to the garimpeiros when they return to sell the diamonds.

Developed world turns ‘blind eye’

Data from the African Diamond Council indicates that in the case of smuggled rough diamonds of African origin, an estimated 28% to 32% of revenue out of the total African diamond production is lost. Ngenge says this lost revenue pertains specifically to rough and natural, undocumented or uncertified diamonds which are smuggled to the main diamond centers outside of the continent.

“In some cases, illegally transported diamonds are seized and become the property of the state of the countries that confiscate them,” he told DW.

“So the ‘developed world,’ as Pope Francis recently called them, is certainly guilty of turning a blind eye, ear and mouth to this kind of omission,” the African Diamond Council president told DW.

Faking origins

DW also spoke to an expert in the geopolitics of diamonds, who requested to remain anonymous before highlighting some of the mechanisms of money-laundering behind the trade.

“Sometimes diamonds are stolen from mines in Angola and transported to the DRC, and then exported to Dubai with documents stating that these diamonds come from the DRC, while originally they are from Angola,” he said.

This way, custom tariffs and other fees are evaded, the provenance of the gems is concealed, labor standards are circumvented and the dynamics of an entire industry built on the principle of supply and demand manipulated.

“Fortunately, this is not happening on a large scale like it did between 2000 and 2015. Hopefully, this situation will be controlled or even resolved, though the borders between the two countries are very difficult to control.”

According to the African Diamond Council president, however, the only way to combat such activities would be by actively fighting poverty in the affected communities and ensuring that diamond extraction can only be achieved by regular means.

No benefits for communities

Rafael Marques de Morais, an Angolan journalist and author of “Blood Diamonds,” is critical of reforms in the Angolan and international diamond trade. He believes that the multilateral Kimberley Process Certification Scheme, established in 2003, is being abused as a pretence to appease critical voices.

According to Marques de Morais, to protocol amounts to little more than window dressing to create a veneer that looks something is being done about reducing the impact of the looting and transfer of mineral resources from poor countries, while in truth it safeguards the interests of countries buying the precious stones.

“This is the problem with the Kimberley Process — it acts according to the strategic interests of some countries,” Marques de Morais told DW. Locals in diamond-rich communities in Africa, he says, are far from seeing any benefits as the rocks are taken to international diamond hubs like Antwerp and Dubai.

“It is enough to say that the diamonds are (presented as) clean to justify everything. But they are not clean because they continue to be violently exploited,” Marques de Morais told DW.

Diamonds fuel Russia’s war

Marques de Morais sees the Kimberly Process as particularly flawed in the face of current geopolitical considerations. He believes that Russia’s involvement in the African diamond trade via the Russian Alrosa corporation helps to finance the war of aggression in Ukraine — while continuing to exploit locals as well.

“There is a conflict. There is the exploitation of local communities, abuses with the local communities in the extraction of diamonds by Russia’s Alrosa group,” the journalist and author said.

The anonymous diamonds expert who spoke to DW, agrees with that assessment. “Targeting the diamond revenue from the Alrosa operation would be a key issue to avoid the quick cash flow injected into their [Ukraine] war effort,” he

“The Belgian prime minister is preparing to send Belgian soldiers [to Ukraine] while Belgium continues to participate and provide Russia with money, with the revenue from the sale of its rough diamonds in Antwerp – blood diamonds. Isn’t there a conflict of interest?”

Edited by Benita van Eyssen