Diamonds

Ian Smillie

• Publisher: Polity
• Year: 2014
• Print ISBN: 9780745672311, 9780745672304
• eBook ISBN: 9780745682808
• Edition: 1
• Topic: Technology & Engineering
• Subtopic: Agriculture
• Index: Technology & Engineering

Diamonds are a multi-billion dollar business involving some of the world's largest mining companies, a million and a half artisanal diggers, more than a million cutters and polishers and a huge retail jewellery sector. But behind the sparkle of the diamond lies a murkier story, in which rebel armies in Angola, Sierra Leone and the Congo turned to diamonds to finance their wars. Completely unregulated, so-called blood diamonds became the perfect tool for money laundering, tax evasion, drug-running and weapons-trafficking.

Diamonds brings together for the first time all aspects of the diamond industry. In it, Ian Smillie, former UN Security Council investigator and leading figure in the blood diamonds campaign, offers a comprehensive analysis of the history and structure of today's diamond trade, the struggle for effective regulation and the challenges ahead. There is, he argues, greater diversification and competition than ever before, but thanks to the success of the Kimberley Process, this coveted and prestigious gem now represents a fragile but renewed opportunity for development in some of the world's poorest nations. This part of the diamond story has rarely been told.

CHAPTER ONE

The Geology and History of Diamonds

Geology

The geology of diamonds is important to an understanding of how the industry has developed, why blood diamonds became so ubiquitous, why some mines require hundreds of millions of dollars in capital investment, and why in other places diamonds can be mined with little more than a shovel, a sieve, and a strong back.

Most of the diamonds mined today were formed more than 100 million years ago, some perhaps 3 billion years ago, long before the dinosaurs, long before single-cell organisms began to turn themselves into what we would recognize today as animal life. Diamonds formed in the upper mantle of the earth, some 150 kilometers below the surface, between its core and its crust. The right combination of minerals, heat, and pressure formed the crystals, and volcanic eruptions through the crust brought them to the surface, embedded in what has become known as kimberlite magma. Some of these “pipes” exploded into the atmosphere, scattering magma and diamonds across vast areas. Others never made it to the surface, leaking into horizontal “dykes,” sometimes a kilometer or more in length. Yet others saw daylight and then sank back, soon enough covered – in the millennial sense of the term “soon enough” – in silt and debris, hidden from view.

Kimberlite eruptions took place around the world, egalitarian in their geographic spread. The best in terms of their The Geology and History of Diamonds diamond content are in Southern Africa, northern Canada and Yakutia in Russia’s far northeast. But diamonds are also found in Australia and West Africa, and directly across the Atlantic from West Africa in Brazil, where the South American land mass broke away from Africa 200 million years ago.

Kimberlite pipes are petrified conical formations with relatively small footprints. The smallest have a surface area of only 5 or 6 acres, while the largest, like one at Fort à la Corne in Saskatchewan, cover as many as 500 acres. Not all of these pipes were created equal. The quality of their diamonds, if there are any at all, depends on a variety of factors, including the speed with which the volcanic magma rose to the surface. Thousands of kimberlite pipes have been discovered, but the number worthy of investment – the ones that are economically feasible – can be counted on the fingers of four or five hands. Given the level of effort and expenditure that goes into exploration, however, it is clear that geologists believe there are more to be found. Canada is a reminder and an icon. The pipes that led to the creation of the great diamond mines in Canada’s Northwest Territories lay undiscovered until 1991, even though the search for them – a modern-day quest for King Solomon’s Mines – had consumed tens of millions of dollars over the previous two decades.

Time has changed what nature wrought. Over several ice ages and 100 million rainy seasons, the tops of some kimberlite pipes eroded, and the diamonds or their trace elements were transported hundreds of miles from their origin. Telltale indicator garnets may be close to the original pipe, or they may have been carried hundreds of miles away by rivers, or in a jumble of glacial moraine. In the case of some well-established diamond areas, the originating kimberlite pipe still remains to be found. The world’s first, and some of its best, diamonds were mined at Golconda in central India, and yet their geological source has never been discovered.

Erosion has created what are known as alluvial diamonds, from the Latin alluvium, meaning “to wash against.” Alluvial diamonds have washed away from the original kimberlite pipe, down rivers and streams, sometimes scattering across hundreds of square kilometers and into the sea. These diamonds may be very close to the surface, leading to a frenzied diamond rush when they are first discovered, or they may be under 10 or 20 meters of overburden, the detritus of 100,000 millennia. Regardless, they do not require the capital-intensive investment of an undisturbed kimberlite pipe. Mining these diamonds requires little more than ingenuity and muscle.

As the story unfolds, it will become clear that the difference between diamonds from the two sources – kimberlite and alluvial – has made all the difference in both regulation and the potential for diamond-related development. While there is no guarantee that a kimberlite mine will be well managed or that it will become an engine of development, the possibility and examples exist. In the case of alluvial diamonds, the opposite has been true. Inexpensive to mine and almost impossible to police, alluvial diamonds are accessible to very poor people, but they have also been a source of chaos, social upheaval, and political corruption. And they were at the very epicenter of Africa’s worst post-Cold War conflicts.

Crystallography and history

The crystallography of diamonds has also shaped the political economy of the industry and efforts at regulation. Three-quarters of the world’s diamonds are so small, so badly formed or so poorly colored that they are relegated to industrial use as abrasives for metalworking and drilling. The value of these diamonds – worth as little as 30 cents, and usually not more than $10 a carat – is based on one of the diamond’s primary features, its hardness. And with good reason: diamond is the hardest known natural material on earth. Its name, appropriately, derives from the Greek adámas, “unbreakable,” a root still used in English for “adamant,” meaning firm and unyielding.

The purest gem diamond is made up of nothing but carbon, crystallized into different forms: the eight-faced octahedron, the six-faced cube, the twelve-faced dodecahedron, the four-faced tetrahedron, and others. When they were being formed, some diamonds picked up impurities – nitrogen, hydrogen, boron – and these affect both color and luminescence. This in turn may provide a clue as to where the diamond was mined. “Blue” diamonds are found mainly in India, while most Canadian diamonds run from clear to a very light yellow. But yellow and blue diamonds are found elsewhere and it is virtually impossible, even for the most trained eye, to identify the geographical source of a polished diamond. It is more possible to make an educated guess about the origin of rough diamonds if they are in a group originating from the same source. It is likely, however, that an expert would be more confident in saying what they are not than what they are. Sierra Leone, for example, has a high-quality “run of mine average.” Looking at a parcel of unlabeled Sierra Leonean diamonds, it would be easy enough to say that they are not from Côte d’Ivoire, where the average quality is significantly lower. Most of the diamonds mined at Marange in Zimbabwe are coarse and low in quality, with distinctive brown and black coloration. In a parcel, they are easily enough identified as Zimbabwean. But Marange’s better-quality gems, while still of green and brownish hues, are similar to stones found in most other diamond mines around the world.

The fact is that, once mixed with others – and often before, in most cases – it is impossible for even the most educated and experienced eye to know where a rough diamond originated. This feature, historically of little interest beyond the mining and investment community, became extremely important during the 1990s and afterwards in the efforts to track and trace conflict diamonds, and to create a global regulatory system.

But the story is getting ahead of itself. What distinguished diamonds in antiquity was their hardness, and only the best-shaped crystals – uncut and unpolished – were used for jewelry. There are several references to diamonds in the Bible, the oldest in the Book of Exodus, thought to have been written in the sixth century BCE. The “breastplate of judgement” is said to contain an emerald, a sapphire, and a diamond (Exodus 28:18), and diamonds appear again in Ezekiel, Jeremiah, and Zechariah as metaphors for the hardness needed to cut stone, or the hardness of human hearts. In Roman times, Pliny the Elder described the properties and value of diamonds in his Natural History, saying, “The substance that possesses the greatest value, not only among the precious stones, but of all human possessions, is adamas; a mineral which, for a long time, was known to kings only, and to very few of them.”¹

Diamonds, like other gemstones, were said to have magical powers, assisting in childbirth, warding off epilepsy and the evil eye, detecting poison. It was not until the fourteenth century that they were first cut and polished, revealing a more authentic feature, one that made them – then and now – the most prized of jewels: the way in which white light is refracted off the facets to create a spectrum of colors known as “fire.”

Pliny and the Biblical writers before him were referring to Indian diamonds, the only known source until the eighteenth century. Arab traders were the purveyors of these diamonds for centuries, but it was a French traveler and connoisseur, Jean-Baptiste Tavernier, who brought the most spectacular Indian diamonds to the attention of European royalty. Between 1630 and 1680, Tavernier visited and documented the mines of Soumelpur, Raolconda and Kollur, the source of the 108-carat Koh-i-noor. The Koh-i-noor, “Mountain of Light,” is now set in a crown that spends most of its time in the Tower of London with the other British Crown Jewels.² Indian mines also produced the 280-carat Great Mogul, the 140-carat Regent Diamond, and the Tavernier Blue. Tavernier brought his 112-carat namesake back to France where he sold it to Louis XIV. Later it was cut into three stones, the largest of them the fabled Hope Diamond, now part of a necklace residing in a sealed glass vault at the Smithsonian Museum of Natural History in Washington.

Indian production declined rapidly after 1700, replaced by diamonds from an unexpected new source, Brazil. In 1725, deposits of rough diamonds were discovered in the eastern province of Minas Gerais, in an area where the primary diamond settlement grew into a town that was named for its fabled output: Diamantina. More diamonds were discovered in Bahia province and Mato Grasso – alluvial diamonds, easily accessible to diggers known in Portuguese as garimpeiros, meaning “prospectors.” During the eighteenth century, Brazilian diamond production rose to 50,000 carats a year, flooding the world market and serving to cheapen a once-rare commodity. Prices became so depressed, in fact, that production dropped and failed to recover for almost a century. It was not until the late 1800s that Brazilian production recovered, rising to 200,000 carats a year or more. But by then Brazil had been eclipsed by South Africa, where discoveries in the 1860s set in motion a chain of events that would change the diamond industry for all time.

Some stories have the first South African diamond discovered by a Griqua boy near the Vaal River in 1859. A more common tale makes 15-year-old Erasmus Jacobs the hero, playing a game of “Five Stone” near Hopetown, 20 miles south of the Vaal on the Orange River, with a rock that turned out to be a 21-carat diamond. Certainly it was Jacobs’ find, later cut into the 10.73-carat Eureka Diamond, that started one of the greatest diamond rushes of all time. By 1870, thousands of adventurers had crowded into the region and more than 10,000 claims had been sold. By the end of that year, an estimated £300,000-worth of rough diamonds had been found – no mean sum. But, given the number of people involved, gross incomes worked out to less than £60 apiece.³ Part of the problem was that most of the newcomers had no idea where to look. The true geology of diamonds was unknown, and even when interest began to focus on the fields of a farm known as Vooruitzigt – “Foresight” – nobody had the actual foresight to see what was to come. The farmers who owned Vooruitzigt, two brothers named Johannes and Diederik De Beer, thought they had done well out of diamonds, selling their land for 6,000 guineas and leaving their name behind for posterity as a synonym for a gem they never mined and never owned.

By the spring of 1872 there were 50,000 people in the De Beer area, and at New Rush, not far away, there were so many diggers moving so much earth that a vast crater was beginning to form. They called it the Big Hole. A year later things had changed again. New Rush was renamed for the Colonial Secretary, John Wodehouse, the First Earl of Kimberley. New laws were passed to exclude “natives” and “coloured persons” from mining, instituting a penalty of 50 lashes to any found in possession of a diamond for which they “could not satisfactorily account.”⁴ The yellow earth of the Big Hole was giving way to a harder blue clay that would later be called “kimberlite,” and a tall, delicate 20-year-old English parvenu named Cecil Rhodes was haunting the area, buying up as many claims as he could lay his hands on.

Geography

Diamond discoveries in other parts of the world are as much tales of accident as of long, painstaking exploration. A railway worker named Zacharias Lewala in German South West Africa – present-day Namibia – discovered a diamond in 1908 while he was shovelling sand away from the track. A frenzied rush into the desert ensued and some 7 million carats of high-quality diamonds were dug up in the six years before World War I broke out and the colony was wrested from German control.

A search for diamonds began in the Belgian Congo in 1906 under the auspices of the rapacious King Leopold II, and success was not long in coming. The first finds were on a tributary of the Kasai River called the Tshikapa, not far from the Angolan border. Later discoveries farther north at Mbuji-Mayi would soon turn the Congo into a major diamond-producing country. Although its diamonds were relatively low in quality, through much of the twentieth century Congo was the largest producer in Africa by volume, a distinction it retains today, only surpassed in some years by Botswana.

The Congolese discoveries sparked exploration in Portuguese Angola where diamonds were discovered in the northeastern Lunda province in 1912. Angola would prove to be a rich source of both kimberlite and alluvial diamonds, resulting over time in great wealth for some and great suffering for millions. The first West African finds did not occur until the 1930s, the richest in the eastern region of Sierra Leone – first alluvial and later kimberlite. Lesser pockets of alluvial diamonds would be located to the north and east in Guinea, Liberia, Côte d’Ivoire, and Ghana. In 1940, a Canadian geologist working in Northern Tanganyika, John Williamson, discovered one of the largest kimberlite pipes of all time. The Williamson mine would be a one-off for what is today Tanzania, low in gem-quality production, but important during World War II and since for its industrial stones.

The greatest and richest discoveries, however, were yet to come: Russia, Botswana, and Canada. Alluvial diamonds had been found in Russia’s far north for generations but it was not until the late 1940s that exploration began in earnest. The Russian diamond legend is not unlike the tales of Erasmus Jacobs and Zacharias Lewala. Larissa Popugayeva was a geologist who knew what she was looking for, but luck was as important in her case as science. It is said that, while prospecting in a forest, she spotted a fox with the fur of its stomach stained a tell-tale kimberlite blue. Tracking the animal to its lair, she discovered that it had made its den in what turned out to be a kimberlitic mother lode. Today Russia produces more diamonds by volume than any other country in the world, second in value only to Botswana.

The Botswana story is surely the most fabulous of all, and, where diamonds are concerned, Botswana is without doubt the most fortunate of countries. A remote British protectorate beset with drought and desertification, Botswana – then known as Bechuanaland – had a population of barely a million people at independence in 1966, and a per capita gross domestic product (GDP) of only $70. One of the poorest countries on earth, it faced a questionable future. Within a year, however, everything had changed with the discovery of the AK1 kimberlite pipe, setting Botswana on a completely new course. AK1 became the Orapa Mine, capable of producing 2.5 million carats a year at its height. Nearby Letlhakane began production in 1977 and the Jwaneng Mine near the South African border opened in 1982, becoming the richest, in terms of the value of its production, in the world. In 2012, Botswana exported $4 billion worth of diamonds, slightly more by value than runner-up Russia, and exactly twice as much as third-place Canada.⁵

Smaller deposits of diamonds have been found in other countries of Africa, and in Guyana and Venezuela. For many years, Australia was the world’s largest diamond producer by volume, although the quality of diamonds, primarily of industrial interest, was low. Coincidentally, the Argyle Mine is located in a district of Western Australia known as “The Kimberley,” named for the same Colonial Secretary as its namesake in South Africa. At its peak in 1990, the Argyle Mine produced 33 million carats, about one-third of combined global production at the time.

One of the greatest diamond rushes of the past 100 years took place in 2006 at Marange in the eastern part of Zimbabwe. Much of Zimbabwe lies on what is known as the “Zimbabwe Archaean Craton,” an ancient crystalline basement rock that is conducive to kimberlite deposits. Theoretically, it is possible that diamonds could be found anywhere in Zimbabwe, and three kimberlite pipes at Murowa in the south central part of the country had already led to a small mining operation there in 2004. But the Marange find was a different order of magnitude. The first diamonds, all alluvial, were discovered in September of 2006, and by December an estimated 10,000 peo...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright
• Contents
• Abbreviations
• Introduction
• 1 The Geology and History of Diamonds
• 2 Supply and Demand – The Business of Diamonds
• 3 Blood Diamonds
• 4 Activism
• 5 Regulation
• 6 Power and Politics
• 7 Development
• 8 Loose Ends
• Notes
• Selected readings
• Index