May 17, 2020

From Conflict to Illicit: What we learned from the illicit diamond report in Cameroon and CAR

Diamonds
mining
Illicit Trade
diamond trade
Dale Benton
4 min
From Conflict to Illicit: What we learned from the illicit diamond report in Cameroon and CAR
Conflict diamonds are still present in international markets.

Thats one of the main takeaways from Conflict to Illicit: Mapping the diamond trade from...

Conflict diamonds are still present in international markets.

That’s one of the main takeaways from Conflict to Illicit: Mapping the diamond trade from Central African Republic to Cameroon, a report from Partnership Africa Canada, published today

The Central African Republic (CAR) is the only source of traditionally defined conflict diamonds and exports of the diamonds have been under international embargo by both the UN and the Kimberley Process (KP).

Fast forward to 2016 and the ban on CAER’s exports was partially lifted from regions deemed to be KP compliant, but it is revealed that this hasn’t stopped the flow of CAR’s conflict diamonds to international markets.

The report takes a closer look at the smuggling of diamonds from CAR into Cameroon and the impact illicit trade has on Cameroons internal controls.

Here are the main takeaways from the report:

Cameroon at the heart of the problem

Cameroon, rather unfortunately, is identified as the transit hub for the illicit trade of conflict diamonds. The country is one of the newest member of the KP but it does not have the capacity to uphold the minimum standards required from KP. Nor does it have the power to eliminate conflict diamonds from its territory.

This is only exacerbated by the weak law enforcement of Cameroon. The report also discovered that the contraband trade is aided and abetted by Cameroonian officials, tasked with implementing the Kimberly Process/

Counterfeit certification

There are two kinds of illicit diamond trade in the report. Conflict diamonds from CAR enter the global market via Cameroon following the valid certification of the Kimberley Process. Ultimately, conflict diamonds are receiving approval – despite being the very thing KP sets out to stop.

The report identifies that this is down to non-existent due diligence and corruption, effectively neutering the ability of the government to assure or safeguard against smuggled diamonds.

Export tax

Cameroonian export tax of 24.5 percent, which is eight times greater than most other African governments, is sought to be the main driver of illicit trade. The report reveals that Cameroon is often used purely as a gateway to other countries, where they can take advantage of lower export tax rates.

Impunity irritation

Named individuals for their involvement in the trade of Central African conflict diamonds still purchase and export diamonds with impunity. These people were named by the UN Group of Experts and their actions speak volumes of the lack of political will to combat smuggling in Cameroon.

Data inaccuracy

Production statistics, collected by Cameroonian KP officials, are often inaccurate and do not actually meet the Kimberley Process minimum requirements. KP officials track where diamonds are purchased, and not where the diamonds are mined. This creates an issue with traceability. 

Cameroon collects statistics on legal diamond exports and not genuine production figures, which the report later details only represents a fraction of the total diamond production and trade in the country.

Refugees and illicit trade

Central African refugees, particularly in the East region of Cameroon, are revealed in the part to serve as a conduit for illegal trade.  With more than 252,000 refugees residing in Cameroon, most of which are artisanal miners, or financers for artisanal diamond mining in CAR it cannot be ignored that they may play a key role in illicit trade.

The report is keen to stress that it is not stigmatising the refugees in Cameroon, rather it hopes that policy makers within the KP consider this in future discussions over illicit trade.

Formalisation and traceability

A lack of traceability of minerals and formalisation in artisanal mining is impacting the traceability of minerals from mine site to export. This is a significant contributor to the number of people smuggling and taking advantage of weak internal controls.

Developmental challenges like this serve as the first step for conflict affected diamonds to pass through the entire diamond chain, from leading trading hubs, to manufacturing shops and finally to retailers worldwide.

Recommendations:

The report outlines recommendations to the Kimberley Process, the Government of Cameroon and to the wider diamond industry.

The KP should place Cameroon under Special Measures, effectively stopping diamond exports for three months. It should also be more vigilant, insistent and ready to take action against diamond trade that does not meet KP requirements.

The Govt of Cameroon should develop an enhanced vigilance plan, revoke trading licences of known illicit traders, and strengthen border controls with CAR.

The wider industry should explore the creation of a Supplement on Diamonds as part of the Due Diligence Guidance on Responsible Supply Chains of Minerals from Conflict Affected and High Risk Areas. It should do so with the Organisation for Economic Co-operation and Development (OECD).

This would allow a more balanced responsibility between private sector actors and governments when it comes to diamond governance – as it stands, it is the govt who bear the largest burden of meeting compliance with KP standards.

 

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Get in touch with our editor Dale Benton at [email protected]

 

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May 5, 2021

Barrick profit beats expectations as copper, gold prices up

Barrick Gold
Copper
Gold
goldfields
2 min
Barrick Gold reports a 78% jump in Q1 profits thanks to strong performance in Zambia and Tanzania

Barrick Gold has reported a 78% jump in first-quarter profit, beating analyst expectations thanks to rising gold and copper prices, and said it was on track to meet annual forecasts.

Production in the second half is expected to be higher than the first, the gold miner said, thanks in part to the ramp-up of underground mining at the Bulyanhulu mine in Tanzania and higher expected grades at Lumwana in Zambia, reports Reuters

Barrick Gold

Barrick’s first-quarter gold production fell to 1.10 million from 1.25 million ounces due partly to lower grades at its Pueblo Viejo mine in Dominican Republic.

Adjusted profit surged 78% to $507mn in the quarter ended March 31, from $285mn a year earlier, and Barrick announced a 9 cent per share quarterly dividend.

Stronger prices helped boost Barrick’s revenue from its copper mines in Chile, Saudi Arabia and Zambia by 31% from the fourth quarter. Overall earnings per share were $0.29, ahead of analysts’ estimate of $0.27.

“We expect a positive stock reaction to the earnings beat and strong cash flow,” said Credit Suisse analysts.

Potential for South Africa merger

Barrick CEO Mark Bristow, who has championed mergers across the gold industry, said he backed the idea of South Africa-listed miners Goldfields and AngloGold Ashanti combining.

Speculation has been swirling around the two companies and Sibanye-Stillwater, whose CEO Neal Froneman floated the idea of a three-way merger.

“I’m a South African, and this country has such a great mining history and it would be great to see a real gold business come out of the many failed discussions that we’ve seen,” said Bristow.

Goldfields

Goldfields declined to comment. In a statement, AngloGold Ashanti said it was focused on delivering on its growth plan to unlock value from its portfolio of gold assets.

Bristow also said he had met with the Democratic Republic of Congo’s new mines minister and other officials and was continuing to work on getting $900mn belonging to its Kibali mine joint venture out of the country.

“We have a solution, it just needs to be sanctioned by the appropriate authorities which haven’t been around for a while,” he said, referring to a recent government overhaul by President Felix Tshisekedi.

Lumwana

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