From: Sierra Leone and its diamonds: Digging in the dumps | The Economist.
The joys of globalisation meant that when the leaders of the Western nations crashed our economy into a wall, the rest of the world is in the nasty pile up that follows…
Over the past few months De Beers, until recently the world’s biggest diamond producer, has seen the value of its “sights”—carefully calibrated sales of rough diamonds to a handpicked club of buyers called “sightholders”—fall from an average of $650m to a recent low of around $150m. In response to collapsing demand, mining companies have been temporarily closing mines or reducing production. This does not hurt countries such as Australia and Russia all that much. But it squeezes poorer ones, particularly in Africa, very hard.
Earlier this year, for instance, De Beers temporarily shut mines in Botswana and Namibia that it owns in partnership with those states. At least three-quarters of the companies in Namibia’s young cutting and polishing industry have closed. “We are suffering quite severely because of job losses,” says Bernhard Esau, Namibia’s deputy minister for mines. In India, home to the largest diamond cutting and polishing industry in the world, at least 100,000 diamond polishers are out of work. America, where half of all polished diamonds are eventually sold, is importing less than half the volume of polished diamonds compared with a year ago.
Not cool. Especially when you consider Collier’s work on development traps and then the link between natural resources (diamonds) and conflict…
But Sierra Leone relies on those consumers to help prevent it from slipping back into chaos. When Koidu Holdings temporarily halted operations and laid off 540 people, leaving only 60 in work, it was especially nerve-racking. For Kono has the highest concentration of former rebel fighters in Sierra Leone. Despite political stability and fairly harmonious elections since the war ended, the conditions that led to it still prevail. Back in 1991, the rebels gained early if short-lived support by arguing that a country as mineral-rich as Sierra Leone should give all its people a decent living. Yet it was at the bottom of the UN’s human-development index when the war started—and is still at the bottom.
But, the Economist ends with a cheery note. War is unlikely because the rebels would find it hard to shift the diamonds, cutting chance of armament-funding-revenue. Additionally, many miners are going back to farming, which should help ease food prices. Here’s hopin.
Sierra Leone and its diamonds: Digging in the dumps | The Economist
From: Sierra Leone and its diamonds: Digging in the dumps | The Economist.
The joys of globalisation meant that when the leaders of the Western nations crashed our economy into a wall, the rest of the world is in the nasty pile up that follows…
Not cool. Especially when you consider Collier’s work on development traps and then the link between natural resources (diamonds) and conflict…
But, the Economist ends with a cheery note. War is unlikely because the rebels would find it hard to shift the diamonds, cutting chance of armament-funding-revenue. Additionally, many miners are going back to farming, which should help ease food prices. Here’s hopin.