Tracing the Path of Tracing the Path of Conflict DiamondsConflict Diamonds

What are diamonds?What are diamonds?• Formed 75-120

miles below the earth’s surface: heat and pressure

• Concentrated in Africa (about 50% of world production)

• Hundreds of millions of years old

The Origin of the Diamond MystiqueThe Origin of the Diamond Mystique• First mined in India; earliest written

reference is from 4th century BCE• Became popular among European

royalty starting in the 13th century• Extremely rare until about 1870,

when huge diamond deposits were discovered in South Africa

De Beers and the De Beers and the Marketing of Marketing of

DiamondsDiamonds• 1870s: huge diamond

deposits discovered in South Africa (then a British colony)

• Cecil Rhodes buys diamond fields and creates De Beers Mining

• De Beers rapidly takes over nearly all diamond mines in South Africa

Marketing diamonds: Marketing diamonds: manufacturing manufacturing

scarcityscarcity• Goods are expensive if they are scarce – i.e., the

supply is limited

• Diamonds aren’t actually scarce – so De Beers acted to create scarcity

• Enabled by its monopoly over diamond supply, De Beers restricted the flow of diamonds onto the market, enabling it to keep prices high

Marketing diamonds: Marketing diamonds: maintaining a maintaining a

monopolymonopoly• De Beers aggressively moved to win a monopoly

over diamond mines

• Monopoly allowed De Beers to keep prices high

Marketing diamonds: Marketing diamonds: creating demandcreating demand

• De Beers also aggressively marketed diamonds

• “A Diamond is Forever” – 1947 marketing campaign

• Diamond engagement rings – popularized by the end of the 1950s

So what are conflict So what are conflict diamonds?diamonds?

• Thanks to these tactics, selling diamonds is extremely profitable

• In some African countries – Angola, Congo, Sierra Leone – rebels illegally mine diamonds and sell them to pay for weapons

How do conflict How do conflict diamonds fuel war?diamonds fuel war?

• Impact on fighting: sold for funds that allow wars to continue

• Impact on civilians: thousands of ordinary people are used as slaves to mine diamonds

Conflict Free Diamonds?Conflict Free Diamonds?• Small and easy to transport =

difficult to track• Conflict diamonds mixed with

conflict-free diamonds• Almost impossible to know

the true origins of a diamond

The Kimberley ProcessThe Kimberley Process• Introduced in 2003 by governments and the

diamond industry• Attempts to eliminate trade in conflict diamonds• Government: must certify diamonds as conflict-

free before they can be shipped• Industry: agrees to certify diamonds as conflict-

free on invoices• Possible shortcomings?