The first South African project to bring illegal miners into the formal fold has been plagued by violence in diamond capital Kimberley, dealing a major blow to national efforts to stem a booming illicit trade.

The project was launched 18 months ago in Kimberley, the site of a 19th-century diamond rush that lured fortune-seekers from about the world. Mine owners granted more than 800 unlicensed, or informal, small-scale miners the right to legally mine about 600ha of diamond-rich waste fields...

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