Diamonds symbolize so much: as the stone most commonly used for engagement rings, the diamond is a powerful token of love, purity, and prosperity. Its value relies heavily on its image of being clean, the most perfect thing that nature provides us, so, the current controversy over conflict diamonds (also called blood diamonds) puts a lot at stake.
About one in every ten gem diamonds, it has been estimated, is smuggled from four African nations, Liberia, Sierra Leone, the Democratic Republic of Congo, and Angola, that feed money to a large black market. Some of the profits go to criminal gangs, some to brutal ruling regimes, some to outright terrorists. And the stones are mined under oppressive conditions for the smallest of wages, using methods that damage the countryside.
Part of the problem is human and part is geological.
The Human Side
The human part is the diamond market, an ancient secretive business where dealers trade stones back and forth, combine lots from different sources, and sell them across many borders during their trip to the jeweler. American law demands certification only from the last country to export the stone. It has never been very important to know where a stone comes from—once cut and polished, a perfect diamond sheds its history. And no one in the business is interested in changing things any more than they have to.
Child Labor: Lack of regulation, harsh labor conditions, and poor wages make child labor a regular practice in the conflict diamond trade. Children are commonly considered an easy source of cheap labor and are often sent into small areas of mines that adults aren't able to enter. They are often given dangerous and physically challenging tasks, such as moving earth from pits, or risking their lives to landslides to be lowered into small holes or pits on ropes.
In Angola, a recent study found 46% of miners are under the age of 16, with many of the children working because of war, poverty, and the absence of education. And in India, where more than half of the world's diamonds are processed, child labor is commonly used for cutting and polishing diamonds. Taken on as "apprentices," these children suffer for years in dangerous conditions for little to no pay until they are replaced, often by younger siblings.
To dispose of the leftover ore contaminated with Cyanide and other toxins ("tailings"), a mine will create a dam which gets built up over the life of the mine. The gradual building of the dam generally causes the structure to be unsound. In the last 25 years, these dam failures have accounted for three-quarters of all major mining accidents. In 2000, a gold mine resulting from a tailings dam failure in Romania spilled more than 100,000 gallons of cyanide-laced mine waste into the Tisza river, killing 1,240 tons of fish and contaminating the drinking water supplies of 2.5 million people.
Violence & Smuggling: Despite continuing efforts to regulate the industry, diamonds remain more of a curse than a blessing in many parts of the world. While many of the wars from which conflict diamonds originated have abated, state sanctioned violence in the diamond industry has not. In Africa and South America, violence still plagues many mines, with local populations displaced to make way for diamond development.
Smuggling is also rampant in the industry, making the global diamond trade one of the largest black markets in the world. Diamond smuggling intensifies violence and instability in diamond-producing regions. It also reduces the amount of money flowing back into diamond-producing communities, depriving the government of tax revenues needed for basic services.
Fueling Conflict: Since the beginning of the 20th century, diamond-rich regions and their neighbors have endured unspeakable devastation for their wealth. The terms "conflict diamond" and "blood diamond" only entered the public consciousness recently, as the funds used to conduct devastating civil wars in Africa that ended millions of lives were traced back to diamonds. The conflict diamond trade has dealt permanent scars to people and nations around the world, fueling bloody civil wars, human rights abuses, child labor and terrorist organizations.
Despite widespread acknowledgment in the industry of their existence, these conflict diamonds have been smuggled into other regions and are now indistinguishable from the rest of the supply. Until now, it has been nearly impossible to verify the origin of diamonds and the conditions in which they are produced. The diamond industry's attempt to address the problem of conflict diamonds resulted in the Kimberley Process, which has been deemed woefully inadequate by independent NGOs and government monitoring bodies. The fact remains that conflict diamonds still exist.
The Geological Side
Geologically, gem diamonds lend themselves to anonymity. They are as anonymous as cash. Diamonds are extremely pure minerals, built of a tight matrix of carbon atoms and nothing else. Stray atoms of nitrogen, boron, or hydrogen—a few parts per billion—are the most significant impurities. These can barely be measured accurately with (expensive) current techniques.
Uncut gem-quality stones differ only subtly around the world:
South African and Indian gems include yellow and blue stones.
East African diamonds are etched.
West African and Canadian stones are fibrous.
Siberian diamonds tend to be sharp-edged and clear.
Some Australian stones are pink.
Experts can tell where uncut stones originate, but only if they have a batch of a hundred or so to inspect. Judging origins is largely a matter of statistics. and pinpointing one mine, or even one country, is rarely simple.
Moreover, a large fraction of contraband diamonds are mined from riverbeds in placer (sedimentary) deposits, not hard rock. Because diamond is extremely hard, grains can travel very far from their origins. The diamond placers of southwest Africa, for instance, include stones from forbidden Angola as well as legitimate Namibia.
My Final Thoughts
In my opinion only human-based systems have any hope of keeping diamonds conflict-free: unbreakable codes, certified containers and rigorous chains of custody. Along those lines, the world's diamond dealers are proceeding with the Kimberley Process, which was endorsed by the United Nations Security Council in January 2003 as part of the UN's conflict diamond program.
In closing I have to add that Diamonds are anything but an “investment”. Did you know that 1-carat diamond will set the buyer back about $5,000, which amounts to $710,000? Even worse than a car once it’s driven off the dealer's lot, a diamond will never be worth what you’ve paid for it. Try to trade it or sell it or pawn it and you’ll be sorely disappointed. Do you know why? Because their “worth” has been artificially inflated! Diamonds aren’t scarce or rare.