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Sanctions on Russian diamonds: Good or bad for Africa?

June 19, 2024

Diamond-rich African nations are ramping up production to fill the gap left by the G7 sanctions on Russian diamonds. But not all countries are happy about the ban.

A man shows an unidentified stone.
Diamonds and other precious gems bring massive revenues for some African countriesImage: SIPHIWE SIBEKO/REUTERS

Earlier this year, the G7 , a group of wealthy nations comprising the US, Canada, the UK, Germany, France, Italy and Japan, and the European Union banned rough diamonds mined in Russia.

The ban was part of many sanctions on Russia imposed by Western nations and their allies for President Vladimir Putin's 2022 invasion of Ukraine.

But the sanctions against Russian diamonds, intended to weaken Russia's economy in light of its aggression, could pose a potential risk to the global diamond market's stability.

"When you look at the G7 suggestion that affects the global diamond industry, you have to take into consideration that Africa is the dominant producer collectively," according to M'Zee Fula Ngenge, head of the African Diamond Council (ADC), told DW.

Botswana takes over from Russia

Before the ban, Russia was the world's leading diamond producer.

"What's good for one is bad for the other. We are not anti-Russia," Fula Ngenge said. "But the fact that Russia is being considered to have sanctions put on them moves Botswana up to the number one position."

Fula Ngenge said Africa could potentially put another country into the top nine diamond producers.

"Most of these diamond-consuming nations are leaning on us now," he said, adding that he sees it as an opportunity to step out of the shadow and take on the task.  

Could diamonds be Botswana's best friend?

African diamond producers, however, feel the G7 countries should have consulted them before implementing the ban on Russian diamonds.

Out of the G7 nations, only Canada is a diamond-producing country.

 "[The G7] totally left us out of the conversation when we feel we are the world leaders [in diamond production]. They should have come to us first," Fula Ngenge said.

In addition, the G7 sanctions require African countries to send their diamonds to Antwerp, Belgium, for certification. Antwerp is considered the central hub for the global diamond industry.

However, Botswana has criticized the arrangement, arguing that it has disrupted the supply chain. Botswana President Mokgweetsi Masisi will meet with government officials and business representatives in Berlin on June 21.

The Kimberley process 

Diamonds mined in Africa are already subject to the Kimberley process, which ensures no "blood diamonds," diamonds mined in conflict zones, end up in the market.

"Pushing everything to Antwerp is a step backward," Fula Ngenge said. He stressed that African diamond producers strictly adhere to the Kimberly process certification.

"We have spent the last two years trying to figure out how to stop Russian diamonds when there hasn't been enough effort into stopping the war [in Ukraine]."     

A white diamond.
Diamonds mined in Africa must go through the Kimberley process certificationImage: picture alliance/dpa

Russia's diamond stake in Angola

Russia's state-owned Alrosa mining company has a 41% stake in Angola's top diamond-producing mine, Catoca. Although the Angolan mine is not under sanctions, Fula Ngenge noted that it is now under pressure due to its link with Alrosa.

The African Diamond Council said it was considering taking Russia out because "we don't want to be associated with anything negative that might potentially impact diamonds being mined in the country unrelated to the Russian Federation." 

A mining pit with excavators lined up.
Diamond producing countries in Africa are increasing production to fill the gap left by sanctions on Russian diamondsImage: PHILIP MOSTERT/epa/dpa/picture alliance

The G7 ban on Russian diamonds has given African countries a more significant role in the global diamond trade.

"My job is to convince that we are powerful and influential enough to step up front and teach some of the major diamond centers how to conduct business."

Eddy Micah Jr contributed to this article

Edited by: Davis VanOpdorp