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Antwerp Diamond Conference supports beneficiation

The 2007 Antwerp Diamond Conference ended on Tuesday with industry leaders supporting the beneficiation policies of diamond producing states in southern African states. Those countries were nonetheless urged by speakers to make use of the history, skills and knowledge of established centres such as Antwerp as they move to create cutting and polishing plants in order to create more added value for their diamonds.

The two-day conference was opened at the Flanders Congress & Concert Centre on October 15 by Antwerp World Diamond Centre CEO Freddy J. Hanard, who welcomed participants from more than 40 countries across five continents. Noting the theme of the event, which was “Producers in Transition: The Changing Industry Dynamic,” he said that producer states were looking to change a status quo in that has existed in the diamond business for many years.

Conference moderator Chaim Even-Zohar said that conference participants were watching history being made, as London’s 350-year exclusive control of global diamond distribution came to an end, in part because of De Beers’ construction of a massive sorting facility in the Botswana capital of Gaborone which, when it opens in 2008, will take over from London and the sorting and distribution centre for the company’s Southern African production.

Keynote speaker Joseph Stiglitz, the 2001 Nobel Prize for Economics laureate, said that changes taking place in the diamond business in the diamond pipeline held out the possibility for the improvement of the lives of millions of Africans living in diamond-producing states. He said Africa’s resources had been extracted without making the countries involved better off. “This led to the paradox of countries that enjoyed the possession of mineral resources being worse off than countries that did not have them.”

De Beers Managing Director Gareth Penny said “resource nationalism” was a growing trend across the globe, but that for African diamond producing countries “beneficiation was not an option, not a passing whim motivated by political correctness, but an imperative, an absolutely essential and critical part of their macroeconomic policy designed to uplift their economies to provide education, jobs and healthcare for their people, and to make poverty history.” Penny added that traditional centres like Antwerp had nothing to fear from the changes. “I would argue that without Antwerp these new cutting centres will not succeed.”

Kago G. Moshashane, the Acting Permanent Secretary at Botswana’s Ministry of Minerals, Energy and Water Resources, said that although his country is today the world’s largest producer of rough diamonds by value, his country’s economy is also wholly dependent upon rough diamond production. “We need to emphasize diversification within the mining sector. Local value addition is viewed as an open option to that end.” But Moshashane stressed that his government will not pursue beneficiation in an irresponsible manner. “Botswana does not desire to recklessly compete where she does not have the natural advantage to do so. We rather wish to actively seek synergies with other world diamond centres and other stakeholders across the industry from mine to market.”

In her speech, South Africa’s Minister of Minerals and Energy Buyelwa Sonjica said beneficiation was a break with the past where Africa’s resources were sold without adding value to the producer states. “For so long, African countries did not receive a fair price for their resources. We must create cutting and polishing plants so that we can have sustainable development. We do not want hand-outs, we want investors,” she said.

The final speaker, Alrosa President Sergey Vybornov, injected a discordant note at the end of the conference. Citing the experience of cutting and polishing plants that belonged to Alrosa, he noted that they had not been economical despite the advantage of receiving supplies directly from their parent company. “We have stopped any form of subsidy in Russia. Only the market can decide,” he said. Vybornov called on the African states that are setting up manufacturing plants: “not to repeat our mistakes. They want to create jobs and increase revenues, but this argument is false. These operations need investments of hundreds of millions of dollars, but the large diamond financing banks do not have a presence in Africa. If plants are set up, the focus should be on economic viability and populist measures must be rejected.”

Bob GELDOF The traditional Gala Dinner of the Antwerp Diamond Conference was held during the evening of October 15, in the presence of HRH Princess Mathilde of Belgium, Some 1,300 guests heard speeches by Liberian President Ellen Johnson Sirleaf, Africa’s first freely elected woman head of state, and development campaigner Sir Bob Geldof.

Johnson Sirleaf spoke about her government’s plans to develop the country’s diamond sector following a civil war and the misuse of its rich resources. Geldof gave his frank opinion on how Western countries, and particularly Europe, must do more to assist the developing economies in Africa. The guests also were treated to a spectacular jewellery exhibition.