Africa Keeps Pressure on Diamond Industry

Under pressure to increase the diamond industry’s benefits to Africa, the continent is very much on the trade’s mind these days, as evidenced by a string of moves from De Beers and the African governments it deals with:

  • In the potentially most serious development, new legislation in South Africa would mandate that a certain percentage of rough produced there would be given to the government to distribute to local companies.In neighboring Namibia, De Beers recently opened an office of its rough distribution arm Diamdel, meant to sell rough to local factories. The president of Namibia attended the opening.

  • De Beers is getting a warmer reception from Lulu Xingwana, deputy minerals and energy minister of South Africa. Xingwana earlier this year expressed “exasperation and disappointment” with Gareth Penny’s promotion to De Beers managing director, whom she called “another white male managing director.” After a recent meeting with the company, Xingwana told South Africa’s Business Day, “We are friends again … we had a very interesting meeting.”

  • The family of De Beers chairman Nicky Oppenheimer is founding a “think tank” to deal with Africa’s problems and explore models—such as Asian ones—that might help solve the continent’s woes. The foundation is already advising African governments.

  • In a speech, Oppenheimer said Africa needs a “hand up, not a handout,” and argued that the answer isn’t nonstop Western aid but a sustained focus on how to use the continent’s resources to benefit its citizens.

  • Phumzile Mlambo-Ngcuka, a frequent De Beers critic and fierce advocate of African “beneficiation,” has been promoted from South Africa’s minister of mines to deputy prime minister, its second-most-powerful position. De Beers issued a statement congratulating her—undoubtedly aware that her ascendancy means the pressure on the industry is not going away.