The Social, Economical, and Environmental Impacts of Diamond Mining in Africa

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Name: Heber M. Galinatti
ID: UMS00858782
Assignment: Final Paper
Instructor: Dr. Moshin Habib
Course: MGT 434

The social, economical, and environmental impacts of diamond mining in Africa For many people over generations the diamond has been a symbol of power, beauty, luxury, uniqueness, and everlasting pure love. For others the diamond has been a symbol of conflict, death, exploitation, misery, and blood shade. All the glamour and beauty attributed to diamonds might be blinding us to the impacts of its operations in Africa. In this paper we will go through a research journey to find out more about the positive and negative impacts of diamond mining in Africa and the diamond industry. Also, this research paper will highlight the impacts of the diamond business operations socially, environmentally and economically in the diverse African continent. There are different types of diamond mining operations according to location and company strategies. Examples of diamond mining are the open pit mining (excavation to reach diamonds on the surface of the ground), underground mining (excavation up 1 mile underground), coastal mining (removal of sand and soil to find diamonds), marine mining (excavation of diamonds in the seabed). Estimates claim that 60% of all the diamond deposits in the world are in the African continent. However it is important to note that not all countries in Africa have diamond reserve mines. In the present day the countries with diamond mining operations are: South Africa, Angola, Botswana, Zambia, Central African Republic, The Democratic Republic of Congo, Ivory Coast, Liberia, Namibia, Republic of Congo, Sierra Leone, and Tanzania. Out of all these African countries the main diamond mining producers are South Africa, Botswana, Angola, Democratic Republic of Congo, and Namibia. Each of these countries has their own particular laws, culture, language, and public policies, but all of them having in common the diamond mining activities. This complex industry employs thousands of people and generates profits around 8.5 billions of dollars each year just from the rough diamonds. The global diamond industry is increasing and generates in jewelry sales $72 billions of dollars each year.

Who are the stake holders in the diamond mining industry in Africa and who benefits the most? Today DeBeers is considered a major role player in the diamond industry. This South African based corporation since 1896 has several operations in different African countries and is responsible for 45% of the world’s diamond markets in the present day. There are other diamond corporations of significant importance in Africa such as Petra Diamonds, Trans Hex, and Diamondcorp. According to the diamond council only 30% of the diamonds mined meet the requirements for polishing, cutting, and jewelry making. The rest of the diamonds around 70% are used are used for industrial applications such as cutting, drilling, gridding, and polishing. The mine owners, the middle men’s, and the government of many of these countries appeared to benefit the most of the diamond mining. For example, a miner in Sierra Leone can work for days sometimes a week without finding a single diamond and therefore not making any money. When the diamond is found they sell it to a middle man in their town for a fraction of its value. Many of these rough stones end it up in trading centers like in the city of Antwerp in Belgium, China, New York, Mumbai, Tel Aviv, Thailand, and Johannesburg where they are polished and cut. Then after that the diamond is sold at five times more than its original paid value to markets worldwide. When we consider these facts is evident that there is a high level of inequality in these industry and the revenues of diamond mining and sales are not shared equally among the individuals involved in this industry. Apparently the trading centers, jewelers, diamond corporations, mines, governments, and politicians benefit the most...
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