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User:Globalecon/African Diamond Mines

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African diamond mines produce approximately 50% of the world’s diamond supply. Today, Africa is said to have mined more than 1.9 billion carats of diamonds at an estimated $158 billion in US dollars. This has earned Africa the title of the largest diamond industry in the world ahead of Russia and Canada.

History

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The first diamond discovery in South Africa was made in the year 1859. However, the history of South Africa’s diamonds really took off when a fifteen year old child named Erasmus Jacobs discovered a unique rock along the bank of the Orange River in 1867. He gave the unusual stone to his neighbor, Schalk van Niekerk, who then sent it to a physician from Grahamstown who knew about these particular types of minerals. He determined that the “veritable diamond” weighed 21.25 carats. Once it was cut to size, the stone weighed 10.73 carats and was dubbed The Eureka. This famous diamond now calls the Library of Parliament in Cape Town home. This young boy’s discovery ultimately changed the world’s supply of diamonds. For example, within the next fifteen years, South Africa produced more diamonds than India had in over 2,000 years.

In the year 1870 a diamond rush emerged and within the year there were two areas that became the main sources for diamonds. These diamond fields quickly became filled with both African natives and white men who were in search of these precious stones. One account stated that the digger population in Africa rose from an initial 2000 to 12,000 men up to an approximate 50,000 in just a matter of months. These men would mine these natural diamonds in one of two ways. Either with a Kimberlite pipe that helps deep shaft diamonds work their way to the surface on waves of molten lava. Usually these stones can be found just below the surface layer of the earth and are mined by machines to get out of the ground. Today, modern deep-shaft mining uses a lot of x-ray vision technology. The second type of diamond mining is with conflict diamonds. These stones have usually been moved from their initial deposit spot by geographic forces such as weathering or erosion. Most of the time the diamonds are found along riverbeds and in shallow creeks, and are mined by hand rather than with machines.

Modern History

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As the diamond mining industry continued to grow and mining corporations formed, Cecil Rhodes, one of eight partners for the De Beers Mining Company Ltd began to draft some laws that would protect the mining companies. He felt that the taxation on the profits of mining should be kept low to insure profit and he also formed the Diamond Trade Act. The Diamond Trade Act was targeted towards diamond stealers and smugglers and set two social standards. First, if someone who worked for the mines was found with a diamond in his possession was assumed guilty until proven that he or she was innocent and they also had to explain how the diamond came into their hands. Secondly, the diamond mining companies were permitted to have their company police conduct “searching-houses” as a surveillance to make sure that workers were not stealing. After the creation of the Diamond Trade Act the production of diamonds rose significantly, which shows that many workers had been stealing from the companies. Today, De Beers still has a monopoly over the rest of the diamond industry by controlling approximately 80% of the world’s diamond industry.

Diamond Market

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With the increase of diamond production about ten times what it had been before the 1870’s what use to be an extremely rare mineral became very accessible to Western societies. This effect caused the world to change their outlook on diamonds. American journalists took the advantage to sell diamonds to the American people.

The South African Diamond Industry has pretty much formed much of its economy. It has helped the economy by employing approximately 28,000 people. With nearly 13,000 people in the business of mining the diamonds, followed by jewelry retailers with an impressive 9,000 employed, jewelry manufacturing with rate of 3,000, cutting and polishing at 2,100 and sorting and valuing diamonds at 900 people employed. In the future, Africa hopes to step up on the aspect of cutting and polishing the stones because many of the diamonds that they export today are still considered rough diamonds. By cutting and polishing the stones they hope to add a value of about 50 percent to the stones while also adding much needed employment opportunities to South Africans. The African Department of Minerals and Energy Affairs is hoping to obtain a status as a globally competitive diamond producing country in the coming future.

According to De Beers’ chief executive, Gary Ralfe, the Botswana and South Africa diamond mines will remain the dominant producers in the years to come. He also states that Canadian mines are rich in minerals but are small and will not have a long life span, and that the resources in the Russian mines is only enough to keep them at a 20% production rate.

References

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