RAPAPORT… Liberian diamonds are being sold in Sierra Leone in violation of the Kimberley Process (KP), which is designed to stop the trade of conflict diamonds, according to Voice of America (VOA), the U.S. government news service. Diamond profits from “blood diamonds” fueled much of the violence in the long-running civil wars in both Liberia and Sierra Leone.
A local parliamentarian told VOA that poor law enforcement in the diamond-mining area has drawn in criminals from across West Africa. He said that lawmakers are drafting legislation to better regulate Liberia’s diamond industry. Because Liberia has been unable to attract legitimate foreign investment to the area, the parliamentarian asserted that it is time for the government to create its own company to buy up Liberian diamonds.
— Additional reporting provided by Acquire Media.
Rio Tinto’s Diamond Revenues Down
Rio Tinto reported that the gross sale revenues from its diamond operations fell 46 percent to $450 million in 2009 as both the price of and the demand for diamonds were severely impacted by the economic downturn. The group’s diamond unit recorded a net loss of $68 million for the year, compared with net earnings of $137 million in 2008.
Total production across its diamond operations fell 33 percent to 14 million carats for 2009. Rio Tinto noted improved market conditions in the second half of the year, however, prompting it to cancel a planned winter closure of its Diavik mine. Rio Tinto’s diamond portfolio includes its flagship Argyle mine in Australia, a 60 percent stake in the Diavik mine in Canada and 77.8 percent of the Murowa mine in Zimbabwe.
Rio Tinto’s total gross sales revenue fell 24 percent to $44 billion in 2009, but the group saw its net earnings rise by 33 percent to $4.9 billion. Chief executive officer (CEO) Tom Albanese said that the company had noticed an improvement in the demand for commodities.
The company is close to reaching a decision regarding whether to resume the development of its underground Argyle mine in Australia, Dow Jones re-ported. Harry Kenyon-Slaney, Rio Tinto’s CEO for diamonds and minerals, told the news service that the company is awaiting the approval of its investment committee to proceed.
Rio Tinto began developing an underground mine at Argyle in 2006 as its open-pit operations decreased. However, this development was halted last year due to the miner’s heavy debt and crashing commodity prices.
Botswana Sees Reduced Role for Diamonds
Kenneth Matambo, Botswana’s finance minister, is not expecting the diamond industry to make the same contribution to his country’s economy as it did before the global recession, according to his recent budget speech. Matambo expects diamond revenues to decline by 36 percent to $1 billion (BWP 6.9 billion) during the fiscal year that ends on March 31, 2010. He added that a full recovery in the diamond market is not expected until 2012 or 2013. As a result, he stressed the need for the country “to find alternative sources of economic growth.”
Employment in Botswana’s beneficiation sector fell 26 percent between November 2008 and August 2009 to 2,391 workers. The mining company Debswana, a De Beers and government partnership that launched an efficiency program before the crisis, cut 1,384 jobs in 2009 and employed 5,809 people at the end of September 2009, Matambo said.
Meanwhile, Botswana is seeking cutting and polishing training from Indian companies as part of its effort to further develop its beneficiation industry. Dorcas Ana Kgosietsile, Botswana’s high commissioner to India, told the Indo-Asian News Service (IANS) that the synergies between the two countries’ diamond industries should encourage more Indian sightholders to set up shop in Botswana.
