Diamonds lure wealth, conflict to African nations

Diamonds are colorless, brilliant gems

By Rudi Bakhtiar
CNN

(CNN) -- South Africa is a developing nation with an abundant supply of resources and a stock exchange that ranks among the 10 largest in the world. But the nation located at the tip of the African continent suffered for years under apartheid and still wrestles with high unemployment and economic hazards.

Apartheid was the policy of political and economic racial segregation officially sanctioned by the government until 1991.

If there were a bright spot in South Africa's economic history, it would have been the discovery of diamond deposits in the mid-to-late 1800s.

"If one puts it in historic context, the first diamond officially found in South Africa was discovered in 1866," said Brian Roodt, corporate affairs manager of De Beers Group, the largest diamond marketer in the world.

Hope Town, South Africa, a community perched on the banks of the Orange River just south of Kimberly, claims to be the place where the first dazzling gem was found.

"With the discovery of the diamonds here in the Kimberley area, the whole evolution of modern industrial South Africa, as we know it, really began," Roodt said of the diamond discovery.

EXTRA INFORMATION • Blood diamonds: Timeline of conflict  • Diamonds: From mine to market  • Interactive: Conflicts in Africa

The discovery of gold came soon after in the same area, but it was the finding of the colorless gem that jump-started an economically stalled nation.

"Prior to the discovery of diamonds, South Africa was essentially an agricultural outback, and ships plying between Europe and the East used to stop here to replenish their supplies," Roodt said. "So it was the uncovering of diamonds that really triggered the development of modern industrial South Africa."

While diamond mining has been a boon to South Africa and neighboring Botswana, elsewhere on the African continent, in nations such as Angola, Sierra Leone and the Democratic Republic of Congo, the valuable gems have been a source of horror.

Diamond mining in South Africa

Control over diamond mines in these nations is inextricably linked to bloody civil wars fraught with human rights abuses and atrocities.

Known as "blood" diamonds or "conflict" diamonds, gems mined from conflicted nations account for up to 4 percent of the global diamond market, according to the diamond industry. Human rights advocates dispute that figure, arguing that as many as 15 percent of all diamonds on the market could be "blood" diamonds.

An inter-governmental forum mandated by the United Nations, dubbed the "Kimberly Process," hopes to curb the number of diamonds that reach the public from exploited and war-torn nations.

It calls for the certification of all rough diamonds, so the consumer may obtain the entire history of any diamond -- from where it was mined to where it was cut.

"If everyone is concerned about what is happening in terms of 'conflict' diamonds, and insists on a certificate of provenance before doing a transaction in diamonds, that will filter, and even marginalize, people that are dealing in 'conflict' diamonds," said Peter Moeti, De Beers production manager. "They will run out of people to sell to."