Leading diamond traders to back African polishing industry

Gareth Penny, De Beers Group managing director, called on European, Israeli and American  diamond traders to support Africa's efforts to cut and polish its own diamonds.

Photo: Leading diamond traders to back African polishing industry

Leading diamond traders to back African polishing industry

The head of the South African miner - which controls 40 percent of the world's diamond trade - said it was not altruism to stabilize the diamond business by creating jobs in African democracies.

"We don't embrace this out of some misguided enthusiasm or altruism, we embrace it because it makes good business sense and because it's the right thing to do," he said.

People will not buy 'conflict diamonds' stained with blood nor will miners invest the billions of dollars needed to extract them, he said.

"We need a strong and stable set of producing companies if we have to maximize future supply. Producing and selling diamonds today in or from a country in chaos or worse, in conflict, is simply not an option," Penny said

Africa's natural resources have enriched traders across the world and Penny called on the gemstone business in Antwerp, Tel Aviv and New York to fund and help train the infant industry, mostly based in South Africa and Botswana - which owns 15 percent of De Beers.

"Without the traditional cutting centers, these new cutting centers will not succeed," he said, promising they would also gain from new opportunities.

Botswana mining ministry official Kago Moshashane said the country planned to create up to 3,000 jobs in the diamond processing industry.

Antwerp, which once sparkled as the focus of the diamond cutting trade, has ceded its place to India's Mumbai which now cuts most of the world's diamonds, many of them less costly small stones.

Antwerp grew wealthy from Belgium's rule of the Congo but is now an important focus for diamond trading and finance.

Antwerp World Diamond Centre's chief executive Freddy Hanard said Africa's desire to take more of the business did not pose a threat.

"If that contributes to greater wealth in Africa, I think we should certainly contribute. Antwerp has a lot of expertise and ... we can help them," he said.

Nor should the rise of Africa pose a problem for Asia, Penny said, because African countries will have to find their own market niche. They will need "vibrant low-cost cutting centers in India and China to process the volume of low-value rough which is simply not economic to cut in Africa."

The De Beers chief was upbeat about Africa's future, saying the company was spending more than US$100 million (€71 million) every year to seek new mines, "overwhelmingly in Africa and significantly in the Democratic Republic of Congo and in Angola."

Along with Sierra Leone and Liberia, oil-rich Angola is recovering from years of conflict that saw diamond wealth fuel the fighting, eventually leading to international efforts to outlaw the sale of illegally mined gemstones.