Diamonds In Africa Blessing Or Curse Economics Essay

It is believed that Africa is the largest producer of diamond in the world. The production of diamond in some of the African’s countries pave ways to increase in their economy and also brings foreign industries thereby creating contact to major mining companies with the people. It also brings about some major violence, war and illegal smuggling in some of the major diamond producing Countries in Africa. This report will discuss whether the production of diamond in Africa is a blessing or curse. However, it will focus on two major areas 1, diamond as a blessing to Africa and 2, diamond as a curse to Africa.

OBJECTIVES

The objective of this report is to discuss diamond a blessing or a curse to Africa. The student undertaking the report will develop the knowledge why diamond is a blessing or curse to Africa.

AIM

The aim of the report is for the student to understand and prove that diamond is either a blessing or curse to Africa.

INTRODUCTION

Diamond in mineralogy means an allotrope of carbon, where the atoms of carbon are being arranged in a variation of the face-centered cubic crystal structure which is known a diamond lattice. The acquisition of diamonds in Africa has brought blessings and also curses in various ways. It has really made some countries wealthy which increased their economy and also caused violence in some countries since diamond is a precious substance.

DIAMOND AS A BLESSING TO AFRICA.

Africa is known as the largest producer of diamonds in the world. They produce as much as 50% of the global production. Africa has however produced over 75% value of the world’s diamonds to date with more than 1.9 billion carats which is worth an estimated 158 billion USD mined. However, the leading producers of diamonds are Angola, Botswana and South Africa.

The activities of mining are being centered around Central Africa (South), with the diamonds which are being primarily produced from kimberlite mines (South Africa, Angola, DRC, Botswana, Ghana, Tanzania and Lesotho), which is followed by the dredging operations (CAR, Angola, South Africa and Namibia) and the offshore marine activities of diamond (South Africa and Namibia).

Diamond production in Africa is a blessing because the economy of the leading diamond producing countries in Africa has increase boosting their economy and their interaction with other countries of the world. Below are some of the fact about Africa diamond producing countries and their interaction with other junior mining company:

SIERRA LEONE

Sierra Leone is very rich in diamonds and other minerals, diamonds were discovered in Sierra leone in 1930. In 1934, the Sierra Leone Selection Trust began alluvial diamond mining operations within the Kono district. Ever since then, the regional production of diamond within the Koidu, Kenema and Bo mining districts has been limited to very small-scale artisanal operations, thereby taking place within diamond-bearing rocks and gravels located in the drainage basins of the Bafi, Mano, Moa, Sewa and Woa Rivers.

Artisanal mining is a primitive, non-mechanized method of diamond extraction, involving little more than hand-digging of river-bank mud, sand or gravel (alluvium), which is then sifted using hand-held sieves.

Today, artisanal diamond mining from alluvial secondary-deposits accounts for 90% of West Africa’s diamond exports, and is still one of the largest sources of employment in Sierra Leone, second only to subsistence farming.

SOUTH AFRICA.

South Africa is a country which produced about 11.1 Mct in the year 2003, basically from De Beers operated mines and from the offshore marine operations. Basically, there are several foreign junior mining companies that are really making a very good progress on the exploitation of South Africa’s comprehensive inland alluvial resources, and also re-evaluating the marine resources which are shallow and are located along the West Coast of South Africa .

BOTSWANA

Botswana is however known as the leading producer of gem quality diamonds in the world, producing some 30.4 Mct in the year 2003 compared to 28.4 Mct in the year 2002. The diamond industry however, accounts for 70% of the export earnings within the country of Botswana and 30% of Botswana’s GDP. Botswana also has cobalt, nickel, copper, soda ash, gold and coal deposits that are now being exploited and developed. Due to how poorly exposed the geology of Botswana is, exploration techniques has relied on geophysics to a very large extent.

The production of diamond in Botswana is dominated by Debswana, which is a joint venture company owned by De Beers Investments (50%) and the Botswana Government (50%). There are three operational mines owned by Debswana which are Lethlhakane, Orapa and Jwaneng. The Letlhakane mine which is near Orapa was the much larger Jwaneng in the south coast of the coubtry and founded in the year 1973, while Letlhakane was produced in the year 1977. Jwaneng is however known as the largest and the richest of the three operational mines owned by Debswana and one of the largest diamond mines in the world but did not start mining operations until 1982.

Botswana as a country participates in the Kimberley Process, the governments association of production of diamond and importing countries, commercial diamond firms and pan-industry associations, non-governmental organisations (NGOs), which has implemented a certified system for the international rough diamond trading, designed to prevent so-called “blood” or “conflict” diamonds from being shipped through legitimate trading channels.

NAMIBIA

The mining of diamonds is one of Namibia’s main products of export, which aims at producing 1.4 Mct in the year 2003 which is a majority produced by De Beers’ Namibian subsidiary, Namdeb. However, the new producers in Namibia are Canadian listed Namibian Mining Corporation (Namco) which has made a lot of outstanding progress with its marine mining operations. The recent improvements in the methods of marine mining, led by De Beers Marine, Namco and DFI/Trans Hex, will however, make these operations more lucrative. The whole Namibia coastline is now being explored / exploited for marine diamonds deposits. Also, with the fast influx of diamond exploration companies, in some operators of marine, Namibia has created a law which is a new Diamond Act, which will also control and regulate the sale and production and of rough diamonds

ANGOLA.

Angola’s state run company (Endiama) still produces a lot of Angola’s diamonds, although large production amounts are still being produced by artisinal workers. A lot of foreign companies are associated in the development or exploration of potential kimberlitic and alluvial deposits. Following the newly peace initiatives in Angola, the security situation has really changed and improved very well and Angola’s diamond potential can once again be appraised. Angola produced just over 3 Mct in 2003.

DEMOCRATIC REPUBLIC OF CONGO (DRC)

The production of diamond from the Democratic republic of congo continues with 19.7 Mct being produced in the year 2001 making the Democratic Republic of Congo one of Africa’s largest diamond producers after Botswana. Artisinal production contributes more than half of the Democratic Republic of Congo’s production.

Offshore/Marine Diamond Mining

Offshore, or, marine diamond mining development and exploration have risen in the last few years owing to a rise in the diamond price, and in the advent of this, it has gained economic viability.

The above are some of the African’s countries that as a result of diamond production have increase their economic potential and attract some major mining companies into their area and thereby increase their relationship with some other countries that is non Africans. It is a blessing because of the major potential increase in economy and their relationship situation among others countries and the increase of industrial activities in the areas. Anything that is blessing most has some aspect of curse in it in order to balance the advantage and disadvantage. Below is some of the curse of diamond production in Africa.

DIAMOND AS A CURSE TO AFRICA.

The increase of violence, illegal smuggling, and wars in some of the major diamond producing countries has made the blessing of diamond production in Africa turns to curses, eg

However, there are no better known symbol of the link between African resources and conflict than diamonds, therefore called “blood diamonds.” It is because they are small, diamonds can easily be smuggled and transported. In the world markets, the very high price diamonds fetch can buy so many arms and pay fighters or otherwise sustain the activities of the military officers.

During the Sierra Leone’s long civil war back in the day, the most fiercest fighting was over control of that country’s diamond fields. The Diamonds which were smuggled from Sierra Leone also helped in the financing of one side in the war in neighbouring Liberia, as did illegal exploitation of Liberian timber and iron ore. During the war in Angola, the government of Angola derived income by managing the oil fields in foreign countries while the UNITA organization survived through unlicensed diamond mining. Campaigns were held by non-governmental organizations (NGOs) to aid the process as well as media coverage’s of the event, and in the year 2000 the Kimberly Progress Certificate Scheme was established; it is an organization supported by the UN that is aimed at preventing illegitimate diamond business and the occurrence of conflict diamonds. It was set up with the initiative of assuring traders that by purchasing diamonds they were not financing war. The Kimberly Process ensures that its Member States endorse shipments of conflict diamonds to specify their origin in order to ascertain its authenticity and they have the obligation to punish violators. In Belgium, experienced people in diamond exchange examine the diamonds composition in order to ascertain the origin while in the Eastern part of the Republic of Congo, the peacekeepers serving under the United Nations are delegated to ensure and diamond and gold are not smuggled. The Process has been successful in some countries and has failed occasionally; in the year 1999 in Sierra Leone, $1.2 million in diamonds was reported to have been legally exported, but over the years it has deteriorated, in 2005, the figure increased to $140 million as a result of the advice of the certification scheme that miners should sell their diamonds to recommended dealers. It has since been reported in Sierra Leone that an estimate between $30 million and $160 million worth of diamonds are smuggled yearly. The Kimberley Process has had limitations as well as impacts ever since it was introduced; an instance of its limitations is in the Northern part of Cote d’Ivoire, where diamonds are still exported illegally which poses as a problem for Global Witness because it might result to little or no effect of the Kimberly Process. However, measures have been delegated as regards this issue, for instance the 15 November plenary meeting of the Member States to ensure that exports from West Africa are monitored as well as the origin. Another limitation of the Kimberly Process is brought upon by the South African NGO, SaferAfrica, whose initiative is to run a voluntary international organization depending on the governments, private organization as well as diamond dealers to be keen to assist and cooperate to ensure effectiveness; the problem lies when there is not much assistance and willing bodies. SaferAfrica suggested that supporting the government, NGO’s and other cooperative bodies to ensure that there is compliance with the Process and advised that violators be punished.

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WEALTH SHARING.

Also some of the problem that affect Africans diamond production and other resources in Africa is the way of sharing the wealth, which is the major cause of war and conflicts.

If the benefits derived are not shared within the African countries there would be limited impact as regards the efforts of the government in making sure that the natural resources are managed effectively, in order to abstain from problems within the countries it is imperative that the wealth derived should be shared more widely within these countries. Many areas that are rich plentiful resources like oil, diamonds are suffering from the Niger delta in Nigeria to Kono in Sierra Leone which is not supposed to be if only the wealth and benefits of the resources was allocated and shared properly.

Mbuji-Mayi in the Democratic Republic of Congo handles most of the diamond mining in Congo and even in the world, is still impoverished, lack of educational facilities, power shortage, and the children in its province suffer malnutrition which is because the benefits derived from diamond exportation does not get to these areas that are in need to be developed for better living.

To counter poverty, African governments have been strongly advised to ensure that the wealth derived from the natural resources should be used to build up these local communities. In most cases, the idea of income sharing has resulted in peace agreements. As a result of the 2003 civil war in Sudan and the revolt of the Sudan People’s Liberation Army the governments has resulted into ensuring that these two sides enter into an agreement to share incomes and oil.

In Nigeria, when the share for oil in Niger Delta was increased to reduce complains at the local level all 36 states received equal allocation of the oil income until 2000, but due to corruption and mismanagement most of the money derived went to the influential people and the leaders in the cities instead of the benefits going to the local communities for development. Now the governments of the oil producing are demanding that the share be increased to 20-25 per cent but a committee anticipated for the share to be 18 per cent in March 2006. Some foreign oil companies are directly financed in order to assist and help the situation.

BREAKING THE LINK OF CURSE TO BLESSINGS.

Africans and other international associates are making efforts to ensure that the continent attains development, by primarily focusing on the ways to break the links between corruption and natural wealth. The UN under Secretary – General and Special adviser in Africa, Legwalia Joseph Legwalia, the Botswanan politician; he has a contributed in some of Africa’s wars like the Sierra Leone, Liberia, Angola and the Democratic Republic of the Congo wars.

With such an approach, the experts argued, the exploitation of natural resources can be better directed towards improving society as a whole, by reducing competition and transforming natural wealth “from a peace liability to a peace asset.”

The presence of a valuable natural resource is not, by itself, a “curse” destined to incite conflict.

CONCLUSION

From the points discuss above, it is a fact that Africa is the world’s largest diamond producer irrespective of their violence, war, illegal smuggling etc that affect the people in the area. With the help of NGO’s and others the violence that is erupting the production of diamond as been rescues in some of the countries and mining companies are still operating thereby leading to increase in the economy of the countries. This report concludes that diamond is a blessing to Africa with the view of the fact that there is an increase in the economy situation and the major aspect of conflict around the continent government has created different way within and outside the continent to maintain peace and other with better security situation being put in place.

The truth is that diamonds should be a blessing to Africa generally because diamonds are forever, they aren’t like humans that can eventually die one day so is not a reason for wars and crises and smuggling because it lives forever.