I Used to Think… - PowerPoint Presentation

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Slide1

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?Slide2

De Beers is a South African diamond company that controlled a majority (80%) of the market in the 1990s

Diamonds are formed 120-190km 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 15-25%)

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-freeSlide3

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?