Diamonds trade watchdog mulls fate of Russian gems

The Kimberley Process (KP), an international scheme that certifies rough diamond exports, is expected to decide this week whether Russian diamonds should be declared conflict gems.

Members of the KP are meeting in Gaborone, Botswana, until Friday and one of the main topics in the agenda is to discuss whether Russian diamonds are funding the war in Ukraine.

The debate would be around whether to broaden the KP's definition of conflict diamonds to include state actors.

The certification scheme, set up in the early 2000s, defines conflict diamonds as gems used to fund rebel movements seeking to undermine legitimate governments.

The KP has the power to ban gem exports from certain countries, as it did in 2013 when rebels seized power in the Central African Republic.

For the World Diamond Council (WDC) president, Edward Asscher, the Russia-Ukraine conflict should be out of any discussions held this week.

“As I stated publicly, irrespective of what I or my colleagues may feel personally about the dreadful events in Central Europe, a war between two sovereign states clearly falls outside the current mandate of the KP,” the industry body leader told the plenary.

Russia’s Alrosa (MCX: ALRS), the world’s top diamond producer by output, has already been affected by sanctions from the United States and Britain. The Responsible Jewellery Council (RJC), the leading standards organization of the global jewellery and watch industry, suspended Alrosa’s membership in April.

“That is fact, and we would be compounding a tragedy if we allowed the war in Europe to damage what we are able to achieve in Africa,” Asscher said.

Back in the market

The miner, which accounts for about a third of global rough-diamond supply, is back selling more than $250 million of diamonds a month, with sales currently only about $50 to $100 million a month below pre-war levels.

While there is no indication that Alrosa has breached sanctions or laws, there is still a widespread unease about the implications of dealing with Russian companies.

Based on estimates from the KP and the United Nations, the only current case of rebel forces controlling diamond-producing areas is in Côte d’Ivoire, in West Africa. That constitutes less than 0.1% of the world's production.

THIS ARTICLE WAS ORIGINALLY POSTED ON MINING.COM