Mining diamonds is a long and arduous process that involves many countries around the world before final products can be sold to high-end consumers. Diamond mining takes place in a number of countries, including Australia, Russia, Canada, Tanzania, Zaire, Angola, and Sri Lanka. After diamonds are mined and sorted by screening facilities, they arrive in one of three countries. Israel and Belgium focus on normal-sized diamonds that can be cut with saws and conventional tools to set. India imports all of the small diamonds that require fine detail work by individual workers. As with many other industries, diamond-cutting has been outsourced to India as a means of getting cheap labor. The United States and Hong Kong are the world’s leading diamond consumers, with a majority of those coming from India.
Diamond trading has been the target of controversy since the De Beers was targeted by United States anti-trust laws during World War II. De Beers owns the Central Selling Organization (CSO) cartel, which handles 70% of the rough diamonds produced by the world and regulates prices to keep them stable. Although not as criticized by OPEC because it deals exclusively in luxury goods, the CSO has come under fire several times, especially by corporations that rely on diamond-tipped tools to produce goods.
The international diamond trade is also often criticized by human rights activists, who see it as an outdated aspect of colonialism. These people argue that diamond companies are essentially robbing natives of valuable natural resources while leaving nothing but poverty and desolation in their wake. Governments still allow the mining, however, because companies often support political candidates in undeveloped countries who allow the diamond mining to continue.
No matter where you stand on the issue, the international diamond trade is an important economic structure with very complex ideas and issues.