From Conflict to Illicit: What we learned from the illicit diamond report in Cameroon and CAR
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/
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.
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.
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.
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.
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.
Get in touch with our editor Dale Benton at [email protected]
Vale invests $150mn to extend life of Manitoba operations
Vale has announced a $150mn CAD investment to extend current mining activities in Thompson, Manitoba by 10 years while aggressive exploration drilling of known orebodies holds the promise of mining well past 2040.
Global energy transition is boosting the market for nickel
The Thompson Mine Expansion is a two-phase project. The announcement represents Phase 1 and includes critical infrastructure such as new ventilation raises and fans, increased backfill capacity and additional power distribution. The changes are forecast to improve current production by 30%.
“This is the largest single investment we have made in our Thompson operations in the past two decades,” said Mark Travers, Executive Vice-President for Base Metals with Vale. “It is significant news for our employees, for the Thompson community and for the Province of Manitoba.
“The global movement to electric vehicles, renewable energies and carbon reduction has shone a welcome spotlight on nickel – positioning the metal we mine as a key contributor to a greener future and boosting world demand. We are proud that Thompson can be part of that future and part of the low carbon solution.”
Vale continues drilling program at Manitoba
Coupled with today’s announcement, Vale is continuing an extensive drilling program to further define known orebodies and search for new mineralization.
“This $150mn investment is just one part of our ambitious Thompson turnaround story. It is an indicator of our confidence in a long future for the Thompson operations,” added Dino Otranto, Chief Operating Officer for Vale’s North Atlantic Base Metals operations.
“Active collaboration between our design team, technical services, USW Local 6166, and our entire Thompson workforce has delivered a safe, efficient and fit-for-purpose plan that will enable us to extract the Thompson nickel resources for many years to come.”
The Thompson orebody was first discovered in 1956 by Vale (then known as Inco) following the adoption of new exploration technology and the largest exploration program to-date in the company’s history. Mining of the Thompson orebody began in 1961.
“We see the lighting of a path forward to a sustainable and prosperous future for Vale Base Metals in Manitoba,” said Gary Annett, General Manager of Vale’s Manitoba Operations.