Hoping to play a role: Bruce Cleaver, CEO of De Beers. Picture: REUTERS
Hoping to play a role: Bruce Cleaver, CEO of De Beers. Picture: REUTERS

De Beers is starting a trial in Sierra Leone to work with small-scale and artisanal miners to source additional diamonds in an ethical way using technology to ensure a fresh supply of rough diamonds and provide improved working and living standards for those miners.

De Beers, 85% owned by Anglo American, projects falling supply in the next few years as it shuts mines in Canada and Namibia and moves to underground operations at its Venetia mine in SA, with the outlook for 2017’s supply of up to 36-million carats falling to about 32-million carats for 2019 and 2020.

The project in Sierra Leone is a pilot study and the world’s largest source of rough diamonds by value did not want to put figures on how many diamonds it would source or when it would formalise the project.

De Beers is clearly looking for new sources of diamonds it can hold up as ethically sourced, improving communities’ lives and securing supplies of rough diamonds from a largely informal source of global diamonds and one that has historically been linked to conflict and human rights abuse.

'Secure route to market'

"By providing a secure route to market, offering fair prices and helping to raise standards, we hope to play a role in enhancing the prospects for those working in the sector, while also potentially opening up a new source of supply for De Beers over the longer term," said De Beers CEO Bruce Cleaver.

By cutting out the buyers of rough diamonds who offer less than fair prices and have their own costs of then selling the diamonds, De Beers suggests its model — selling diamonds to hand-picked clients — would offer better prices to the miners, who are registered with the government and operate within the rules of the country.

With a dearth of major finds of diamond deposits, global supply is expected to fall in coming years as older and larger mines are depleted, while demand is forecast to continuing growing.

Global rough diamond supplies have fallen from a 2005 level of 177-million carats to about 140-million carats in 2017.

Paul Zimnisky Diamond Analytics estimated nearly 18-million carats came from artisanal miners in 2017, with 16-million carats from Democratic Republic of Congo, 2-million carats from Angola and 750,000 carats from other artisanal operations, which would include Sierra Leone.

Data from the Kimberley Process, a body working to stop the flow of conflict diamonds, pegged Sierra Leone’s 2016 diamond production at 549,046 carats worth $289m.

De Beers does not have any operations in the country.

The De Beers project, called GemFair, will use technology to record production from sites certified as ethically operated.

The GemFair project is run in partnership with the nongovernmental organisation Diamond Development Initiative (DDI), which is working to formalise artisanal and small-scale diamond mining in Africa.

The Sierra Leone government has pushed for the formalisation of the artisanal and the small-sector diamond mining industry.

"We believe GemFair has the potential to significantly transform the sector by providing a new, secure route to market through the world’s leading diamond company," said DDI director Dorothee Gizenga.