Monday, February 05, 2007

A Brief History of Blood Diamonds

It all started with a 15-year-old’s discovery. Over a century of bloodshed would follow.

Somewhere between December, 1866, and February, 1867, a 15-year-old boy named Stephanus Erasmus Jacobs found a shiny white pebble on the grounds of the De Kalk farm. The farm was located on the south bank of the Orange River in what was then known as the Cape Colony, a Dutch-founded but then British-controlled region in what is now South Africa.

After the boy had played with it for a while, Jacobs gave the stone to a neighbor farmer friend, Schalk van Niekerk, who collected unusual stones. Niekerk in term gave it to a traveling peddler named John O’Reilly, who took it to nearby Colesberg and showed it to Lourenzo Boyes, the magistrate. When Boyes found the stone could etch glass, he proclaimed, “I do believe this is a diamond. Boyes then transmitted the stone in an unsealed package to Dr William Guybon Atherstone, a pharmacist in Grahamstown. Atherstone recognized the stone as a 21.25 diamond of a brownish yellow hue. The stone was purchased by the Governor of Cape Colony, Sir Philip Wodehouse, for 500 pounds sterling and was later show at the Paris Exhibition (World’s Fair) in 1867. The large stone was named, appropriately, the “Eureka” diamond. But an even more spectacular diamond fell into Niekerk’s hands soon after.

The stone was the subject of some controversy. Because the Northern Cape area was not believed to hold stones of value, some speculated that the stone had been planted there. But that speculation was demolished with the discovery of a larger, more valuable stone.

In 1869, again near the banks of the Orange River, a Griqua witch doctor named Swartbooi found an 83.5 carat stone, a brilliant white diamond, nicknamed the “Star of Africa,” on the Zandfontein Farm, owned by two Afrikaner farmers, Diederik De Beers and Joahannes De Beers. Niekerk heard of the stone, and traded nearly all his possessions, including 500 sheep, 10 oxen, and a horse, to the young man for the stone. He sold the diamond to the Lilienfeld brothers for 11,000 pounds sterling. The brothers then sold it to the Earl of Dudley for 30,000 pounds sterling, sparking the diamond rush to South Africa.

Worried about damage from diamond seekers invading their land, which contained two valuable mines, the De Beers sold their diamond-rich land, and Cecil Rhodes took over several of the claims and incorporated the De Beers Consolidated Mines in 1871. Among the mines that Rhodes owned in whole or part were the super-productive Kimberly and Premiere mines.

De Beers, through a cartel that Rhodes helped form, at one point controlled nearly the entire market in diamonds:

In the 1930's, Sir Ernest Oppenheimer, the chairman of De Beers Group and leader of Anglo American, came up with the idea of "single channel marketing" which he defined as "a producers' co-operative including the major outside, or non-De Beers producers in accordance with the belief that only by limiting the quantity of diamonds put on the market, in accordance with the demand, and by selling through one channel, can the stability of the diamond trade be maintained."

This new single channel marketing structure eventually came to be known as the Central Selling Organisation (CSO) ( Basically, Oppenheimer formed a cartel on the premise that he was operating a legitimate enterprise. He stomped out all competition and kept a stranglehold on the supply of diamonds, upping their value and rarity through a limited supply that De Beers doled out carefully. It is safe to say that during this time De Beers Group owned and controlled about 90% of diamond production in the world; thus they could control the "rarity" and value and keep a hold on the lucrative industry. Many of their dealings were shady, and they were known for particular ruthlessness against their competitors.
The poverty caused by the depression in the 1930s and World War II in the forties severely depressed the diamond market. Oppenheimer’s son Harry took over De Beers and went to America to hire an ad company to help them sell more diamonds. He hired N.W. Ayer to launch a marketing campaign, which garnered De Beers the world-famous slogan “A Diamond is Forever.” As the article linked above states:

The goal behind the marketing campaign was to ensure that women kept their diamonds literally forever. The goal was to prevent a secondary market for diamonds by persuading women that diamonds should be untouched by another woman to really have any meaning. This allowed De Beers to maintain control of the diamond trade at wholesale level and retailers to sell diamonds at a high price without competition from secondary markets. [...] It was this marketing campaign that made diamond wedding and engagement rings so popular, and pushed diamonds to become the number one coveted gem by women.
Do you feel manipulated yet? You should.

The sad horror of this is that, as diamonds became more precious, efforts to extract them became more violent:

They are called either blood diamonds or the much less evocative term, conflict diamonds. They can come from Angola, Sierra Leone, Cote d'Ivoire, Liberia, or The Congo. They are mined and sold by rebel armies (such as the Revolutionary United Front) largely to finance the purchase of arms, arms that will be used in the attempted toppling of legitimate, internationally recognized governments. Mass murder, amputation, and the use of child soldiers are an all too common part of the process.

Rough, unfinished diamonds hold many lucrative advantages for these armed insurgents: they are difficult to trace, easy to transport, and are accorded great value all over the world. There's really no currency exchange issues when you're dealing with "ice," as it's referred to in underworld lingo. In rebel-held diamond mining regions, the little subsistence farmland available to local populations is razed and gutted by this gem-lust. Farmers are taken from their land and forced to work as prisoner-labourers in the open pits, being shot on the spot for such crimes as disobedience and under-productivity. More than 1500 of the miners in Sierra Leone's Kona region were children, who could just as easily find themselves drugged, press-ganged, and holding a diamond-bought AK-47, an underaged combatant in a conflict they could have little understanding of. While political stability has increased in Sierra Leone, the same problems are beginning to flare up in other nations, such as Cote d'Ivoire.
Sierra Leone descended into unspeakable horror in the 1990s. As the rebels clashed with the government, elections were scheduled, but people had to vote with a thumbprint. To keep people from voting, the Revolutionary United Front (RUF) instituted a campaign of amputation, to chop off people’s limbs so they could not vote. The violence was so gruesome that Nigerian troops and a United Nations peacekeeping force was sent in to remove the people in power and try to bring about a semblance of normality. In 1999, the RUF and the government of Sierra Leone signed the Lome Peace Accord, marking the cessation of ten years of violence.

To reiterate, the rebels would not have had the resources to wage war were it not for the diamonds within their borders. The rebels used the diamond profits to force more people into slave labor camps to dig up more diamonds to buy more weapons in what was nearly a perpetual circle of violence. So the next time you look at a diamond, don’t think just of its beauty. Think of the blood that might have been shed before that diamond reached your hand, wrist, ear, or neck.

Because of growing international concern over “blood diamonds” from countries such as Sierra Leone, the South African diamond producing states met together in May of 2000 in Kimberly, South Africa, home of one of the original De Beers mines, to find a way to prohibit the purchase or sale of diamonds from regions of conflict. In December of 2000, the UN General Assembly adopted a resolution supporting a scheme for a certification scheme to indicate a diamond’s point of origin. This became know as the Kimberly Process Certification Scheme (KPCS).

While some in the diamond industry, notably De Beers, tout KPCS as the solution to blood diamonds, the guidelines are voluntary, and have reduced, but not eliminated, the problem. It’s up to consumers to demand conflict-free diamonds, to ask to see the certificate of origin. People will still lie and game the system. But the more customers press for this, the more the people who sell diamonds will try to guarantee their customers are satisfied. The worst thing for the diamond companies and the African nations combined would be if people stopped buying diamonds altogether.

I just saw the movie Blood Diamond, which provided the inspiration for this research. As a reporter played by Jennifer Connelly in the film states (paraphrased), no one would wear a diamond if they knew it had cost someone their hand. So ask. Speak up. And support the organizations that are trying desperately to bring peace and aid to the ravaged countries of Africa.


Anonymous David H. Stern, M.D. said...

Awesome movie. Are motion pictures not the ultimate medium for artistic accomplishment?

BTW, did you know E. Howard Hunt died?

(hint hint) ;^)

3:18 PM  
Blogger Real History Lisa said...

LOL, David. I'll get to Hunt. He's going to stay dead, you know. No rush!

3:58 PM  
Anonymous David H. Stern, M.D. said...

Whew! That is a relief on so many levels, I hardly know where to start... :^D

10:04 PM  
Anonymous Anonymous said...

I'm starting to write a paper on the blood diamond conflicts but wanted to make sure if this was all true...

6:42 AM  
Blogger Real History Lisa said...

Don't ever take any Web site's word on anything. Search reputable newspaper sites and magazine sites. Go to the library. Don't stop at just one source - get several and see if they match in the essentials.

I wouldn't write anything I didn't believe to be true. But does that mean I never make a mistake? Trust no one and do your own research.

Best of luck to you!

4:13 PM  
Anonymous Nick said...

What seems to get lost in the conversation is that, conflict or no, the track record of De Beers and others in giving workers reasonable compensation and protecting their health is still abysmal. I hope you will continue to dig on this topic.

3:19 PM  
Anonymous Anonymous said...

I have to write a paper on blood diamonds too.I'm going to use this site also.Are there any other suggested sites that i can use, or maybe a suggested book?

11:32 AM  
Blogger dlwerd said...

Just wondering, could you post your sources. I would like to know where your info came from. (If your wondering I'm doing a history day project on the blood diamond conflict).

11:34 AM  
Blogger Real History Lisa said...

I don't post my sources because all of this information is out there and available. I wasn't writing an essay for others to crib! :-) Do some research. It's good for the soul!

9:09 AM  
Anonymous Anonymous said...

Yeah but you failed to mention anything about the Africans that Cecil Rhodes and his army of 600+ slaughtered with machine guns or how he rewarded them his soldiers with 6000 acres each for their dirty deeds or how they created what they themselves would later call blood diamonds. You are only scratching the surface.

11:52 AM  
Anonymous gemologist certification said...

Point being that there are so many products that we all use day to day and that a good many of them have un pleasantries associated with their production.

2:45 AM  
Anonymous Moe Law said...

this story help me a lot because in my ELD class my teacher wants all her students to find out what is blood diamonds. Thank you for searching!! I'm appreciate.

8:15 PM  
Blogger said...

It's great that at least someone else has made the connection from De Beers price-fixing to the illicit diamond trade. But I think you could take it a bit further; I'd point out that there would be no blood diamonds if it weren't for the price-fixing in the first place. Since the price-fixing racket depends on consumer demand, paying market price for a diamond of any origin results in the blood diamonds fetching the high prices that they're dug up for. This includes Canadian or Australian diamonds, because the mining companies are all in league with De Beers.

I'll be posting an article about this on my website very soon. In the meantime please read my other article on Canadian diamond mines and how they damage the environment.

9:00 PM  
Anonymous Anonymous said...

Blood diamonds are laundered in with non conflict diamonds. When you buy a diamond there's a good chance it's actually a blood diamond, even if it's from debeers and they claim to have proof to show otherwise.

10:43 AM  
Anonymous Anonymous said...


5:24 AM  

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