Africans Champion Local Diamond Cutting

July 1, 2004

Africans Champion Local Diamond Cutting

A growing movement to keep diamond cutting within the countries where diamonds are extracted got a boost this week when Israeli diamantaire Lev Leviev, president of LLD, opened a diamond cutting factory in Namibia, along with officially inagurating his offshore diamond mining operation there. "This will be the largest and most advanced diamond polishing facility in Africa and, I believe, it is the first step on the road to the future growth and development of the economy of this very special country," Leviev said in a speech at an opening ceremony on June 28.

Leviev, whose diamond businesses span the trade from mining to retail (he recently formed a joint venture with Bulgari), is a known advocate of establishing cutting factories in the countries where diamond rough is extracted. He runs several factories in Russia and is exploring or has begun similar ventures in Angola and Botswana. Africans are especially attracted to the idea, to end a long history of companies mining precious materials only to take them out of the country before local people had a chance to benefit by adding value through manufacturing. Africans have been particularly inspired by stories of Russian and Canadian diamond manufacturing efforts in those diamond producing countries. Most African nations producing diamonds see the need to establish local manufacturing to create jobs and wealth to help their citizens.

Diamond experts, including Leviev, have long pointed out how complex and difficult diamond cutting can be to set up and profit from. Lower-cost cutting centers such as those in India and China represent a level of competition that could also create obstacles to success. Nevertheless, many African countries are engaging in open debate about the topic, especially after South Africa proposed in April changing its diamond laws to ensure its local cutters would have first choice of diamonds mined there. This would be a change from its current system, in which De Beers exports all its mined diamonds to London, sorts them, and returns rough to be cut by the local industry.

What impact will these changes have on jewelers in the U.S.? African leaders who are exploring local cutting say jewelers would be able to cite that a diamond was not only mined, but also cut in a non-conflict African country, such as Botswana, Namibia or South Africa. Tracing a diamond's provenance to these peaceful African countries could be a good story for jewelers to tell about supporting local people in a part of the world that needs help.

by Peggy Jo Donahue

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