Notes from the World Diamond Congress, Day One

A few thoughts after the World Diamond Congress’ first day:

– The overwhelming consenus among attendees here is that the Kimberley Process should allow Marange diamonds to be exported. However, no one is sure that will happen — World Diamond Council president Eli Izhakoff put the chance of a deal being reached this week in St. Petersburg at only 50%, although that would jump to 100% if jailed NGO researcher Farai Maguwu was released. (It’s the “highest levels” of the anti-Mugabe U.S. State Dept., even more than the NGOs, that is now considered the biggest impedement to a final agreement.)  (UPDATE: Farai has been released — on bail.)

But what’s interesting is how people are making their feelings known. Zimbabwe’s ambassador to Russia appeared at two sessions, and passionately argued his country’s case. Moti Ganz, president of the International Diamond Manufacturers Association, even declared in the opening session that Marange diamonds are “legitimate,” citing the position of KP monitor Abbey Chikane.

The industry has to be careful here. Declaring that Marange diamonds are fine for export puts the industry at odds with the current position of the KP (and possibly the future position of the KP.) Whether or not the industry agrees with everything the KP does, it also has to abide by it. Next week at this time, Marange diamonds may end up being black market diamonds. In which case, it will not be okay to buy them. So while people in the industry should feel free to express their opinion, they also have to be careful to note that, even if the industry doesn’t agree with everything the KP does, it will stick to its dictates. They don’t want to be seen as possibly giving people a justification to buy black market stones. (Not that people who deal on the black market really care about those distinctions. Still …)

– I was struck by the language used by some of the representatives of Alrosa — they repeatedly talked about “stability,” and how they helped the industry by stockpiling stones during the financial crisis. If you closed your eyes, you would have sworn you were hearing De Beers executives from 15 years ago. For all the strides the trade has made since 2000, in many ways the industry is still stuck in the old “cartel” mentality. While I am all for stability, I think the industry should focus on its other new buzzwords (notably “responsibility,” “transparency” and “sustainability.”) 

– The International Diamond Manufacturers Association wants to have next year’s Presidents meeting in Botswana. Which is a fine idea, except the World Federation of Diamond Bourses has already decided to hold its Presidents meeting in Dubai. If this holds, it would be the first time to my knowledge the two groups held meetings in different places, and probably a low point in the (often prickly) relations between them.

JCK News Director