Rough diamonds

U.N. and De Beers: Efforts to ban gems from financing three African rebellions have modest chance.

July 19, 2000

THE ROMANCE of diamond gems fails to sparkle through the cynical and brutal wars of rebellion fed by sales of illicit stones.

What are the rebellions destroying Angola, the Democratic Republic of Congo and Sierra Leone really about? Chiefly, about the diamonds that fund them.

Diamonds, rough or cut, are easy to hide, transport and sell. It is reportedly possible to determine a stone's geographic origin, but only by destroying it.

Some people think that De Beers Consolidated Mines Ltd. of South Africa, with a huge selling operation in London, can turn any source on or off.

De Beers bought Soviet diamonds a generation ago and Angolan rebel diamonds more recently. It sells to firms in Antwerp, Tel Aviv, Bombay and New York.

The United Nations Security Council resolved to embargo diamonds from Sierra Leone for 18 months. Belgium announced a ban on conflict diamonds from Antwerp and challenged other countries to follow.

Most promising, though, is De Beers' guarantee, issued in March, that none of its diamonds comes from conflict areas and now requires its buyers to do likewise.

De Beers may be acting from fear lest the boycott movement turn against diamond jewelry generally. De Beers has also decided to reverse its 70-year approach to the business. It will quit controlling supply and price, and will liquidate its $5 billion London stockpile.

Instead, it will increase the $170 million it spends annually to say, "Diamonds are forever," in hopes of growing its luxury market.

One of the world's richest diamond mines began producing in the Canadian Arctic last year. Only more demand can absorb more supply at a stable price, but more demand would make a boycott of conflict stones less likely.

The idea is that the conflicts can be ended only by stopping the trade in contraband diamonds. But the reverse is equally true.

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