Blood diamonds have in total caused 3 million deaths. The average blood diamond worker receives 5p per day. Statistics such as these, highlight the true socio-economic problems such as inequality and poverty that blood diamonds cause. Blood diamonds became a big issue in the 1990’s, when civil wars broke out all over Central and Western Africa, encouraging some of the governments and rebels within these countries, to use citizens as slaves to dig for diamonds in order to fund wars and rebellions. These diamonds were therefore named blood diamonds, having been tainted by slavery and violence.

The diamond trade overall is an $81 billion industry. With 65% of these diamonds sourced in Africa, many jewellery companies around the globe could potentially be in possession of some blood diamonds. However, over the last few years, companies have been pressured by governments and consumers to source their diamonds from ethical producers.

Despite this new movement, blood diamonds still pose a serious problem to many economies such as Sierra Leone’s due to their high sales in black markets which are unregulated. Selling these diamonds illegally results in huge profits for crime syndicates, who sell the diamonds at hugely inflated prices to maximise their profit. These crime syndicates buy the diamonds from armed rebel groups or warlords for cheap prices and then sell them off to others on the black market for higher prices resulting in higher profit margins than typical diamond sellers. Despite the aim of recent laws to prevent the flow of blood diamonds; these warlords and rebel groups continue to force innocent citizens to dig for diamonds. This creates a problem as usually the way to remove black markets is to remove the restriction on a certain good or service, however in this scenario if that was to happen the demand for blood diamonds would grow forcing a movement along the supply curve. This movement up the supply curve would occur because warlords want to maximise profits and therefore force more miners to work and thus cause more people to suffer. Thus, this method of getting rid of blood diamonds does not work but in fact makes it worse. 

Even though this issue seems to have no solutions, in the year 2000, African diamond-producing countries discussed the effects that conflict diamonds had on their citizens and economies. They came up with an idea, the Kimberley Process (KP), which was established to prevent blood diamonds from entering the mainstream rough diamond market. The core of this agreement is the Kimberley Process certification scheme (KPCS) which is a certificate placed on rough diamonds, certifying them as “conflict free” in order to persuade sellers to source their diamonds from ethical producers. This seemingly prevents the flow of blood diamonds, while still helping to protect the legal and ethical trade of rough diamonds.

However, some economists and experts in this field suggest the opposite, arguing that despite initially seeming to prevent the circulation of blood diamonds if you delve a little bit deeper into the buying and selling of these diamonds it is clear to see that it does not do nearly enough to stop blood diamonds being bought by big jewellery companies. These experts claim that it does nothing to address corrupt governments or the inhumane treatment of these workers as it only considers a rough diamond to be a conflict diamond if it is used by a rebel group to directly fund a war. This means that workers could still be enslaved and made to suffer horrible conditions to find diamonds and these diamonds would still be given a certificate stating that it was mined ethically. The Chairperson of the African People’s Solidarity Committee said, “Kimberley is nothing more than an attempt to conserve the diamond trade, which is unethical at its core.” Statements such as these, from people in authority, show just how difficult it is to erase the circulation and flow of blood diamonds in African countries. In addition to this, Reuters states that in some African countries such as the Central African Republic (CAR), the restrictions placed by the KPCS have no negative impact on the total output of diamonds from CAR but have seen an increase in the volume of diamonds sold illegally. Overall, it is estimated that upwards of 24 million dollars of diamonds have been smuggled out of CAR despite the restrictions put in place over the past few years. 

Even though the KPCS has not been very successful, there are still other methods which have been developed to lower the amount of blood diamonds in circulation in the rough diamond market. One of these methods is a tracing blockchain program called Tracr founded by the De Beers Group. It compiles information and data about any diamond showing where and how it was mined. All of this data can be found by the consumers allowing them access to view whether their diamonds have been ethically sourced. In addition to this, recent developments in technology have allowed scientists to produce diamonds in a lab. As consumers are more willing to buy larger lab-grown diamonds, the sale of two carat stones have doubled over the last few months of 2022. In fact, these lab-grown diamonds act as substitutes to naturally occurring diamonds. Thus, there has been a pressure on firms to move prices down. No one yet knows how great the impact of lab-diamonds will have on the rough diamond and blood diamond market, but it is clear to see that it will nonetheless influence the circulation of blood diamonds. Could this be the solution that governments have been looking for?