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Eleven Reasons Why Talking About $15billion In Stolen Diamonds Makes You Sound Foolish

Updated: Jun 13, 2019

Background Of Missing Diamonds

In Zimbabwe we’ve been grappling with the prevailing myth that Zimbabwe lost $15 billion in stolen [purloin] diamonds over a ten year period.

According to the claims made by President Robert Mugabe, fueled by a report given by MDC parliamentarian Eddy Cross in parliament.

$15 billion worth of Zimbabwean rough diamonds were pilfered and allegedly pushed onto the global rough diamond market, accompanied by an additional $6 billion worth of diamonds processed legitimately through Kimberly Process channels.

What The Data Says

If this was indeed the case, it would have constituted an unprecedented 15% dump of unregulated rough diamonds on the global market during a global recession.

A gross infringement of the Kimberley Process Convention that would have solicited a swift investigation and response [by them] upon the offending nation.


The numbers of the period are also very telling,

with Rapaport reporting that within this same ten year period, international prices of rough diamonds went up by 30% (see graph).

While mining journals narrate how international dealers, cutters and polishers were scurrying across the globe, searching for stones and bidding up prices in hotly contested auctions.

Trends hardly consistent with a 15% injection of illicit rough diamonds on the global market.

If anything it illustrates a shrinkage in supply, possibly in response to the reduction in economic activity due to the recession. A response in line with the standard price protection mechanisms used by diamond cartels in times of depressed demand.

Diamonds Not A Store Of Value

Some non-industry players have suggested that maybe cutters and dealers were buying and hoarding Zimbabwean rough diamonds for the long term.

While most other Zimbabweans just simply believe without the common sense to ask any critical questions at all.

However, the issue is it's not common practice for diamond dealers to hoard rough diamonds because diamonds are not really in short supply (except when cartels close the taps during times of low demand or recession). Moreover, they are not a smart store of value.

Why Hoarding Diamonds Is Illogical

The fact is diamonds are not scarce or precious, but instead they are highly abundant semi-precious stones formed by the compression of carbon at high temperatures and pressure.

The only reason they are highly priced is due to a combination of marketing induced demand, coupled with the artificial control of supply by diamond cartels.

It's for this purpose that Cecil John Rhodes consolidated the global diamond industry into a dominant cartel called DeBeers, while influencing diamond trade laws in South Africa to frame international law around the resource a century ago.

Later the Oppenheimers took over DeBeers and set up the CSO [Central Sales Organization] after which they established the Kimberly Process Convention to further protect the cartel from independent suppliers, some decades later.

This was all done to ensure that their cartel got full control and monitoring of the supply of diamonds, to kill competition, artificially manipulate prices, create scarcity and support high prices to reinforce the perceived value of diamonds.

To put it in context for you, the biggest diamond companies in the world (DeBeers, Petra, Rockwell, Lev Leviev, Porges) all hold billions of carats of rough diamonds with the aim of reducing supply to the market.

If all these diamonds were on the market instead. They would have depressed diamond prices to levels lower than semi precious stones for good. Resulting in those holding diamonds losing a significant amount of value.

This is common knowledge among diamond dealers as it’s taught in all diamond cutting schools, well documented in textbooks and industry journals.

Besides, the industry trends, production records and accompanying diamond crashes of the 1880s, 1890s and 1920s are abound with dealers who lost large amounts of wealth from hording diamonds.

Artificial Diamonds And Perfection

Another industry concern is the fact that major diamond producers are beginning to manufacture in their laboratories colourful, synthetic, flawless diamonds, that are indistinguishable from natural diamonds.

In fact these synthetic diamonds tend to be bigger and better cuts with very few flaws than what is commonly found in nature.

So in this consumeristic era where less refined, new money clients who demand the impossible for lower prices are driving demand. Dealers have seen greater production of flawless, synthetic, fancy coloured stones for those seeking perfection at value price.

In turn this has depressed the prices of natural cut diamonds. A trend noticed more over the years when a number of antique and rare natural diamonds belonging to celebrities have been auctioned only to fetch less than the initial investment on them.

This is being read as a sign that there is a glut of fancy, flawless synthetic stones on the market, which will lead to further reductions in demand for natural rough gem diamonds and their prices over time.

For these reasons, it’s highly unlikely that Zimbabwean diamonds were ever hoarded by dealers to the extents suggested by the $15mil number being punted.

Industrial Diamonds

We also have boart or industrial diamonds constituting 80% of Zimbabwean production. These have industrial use in military, tool and machine manufacturing, however, they come at significantly lower prices and higher volumes that make smuggling almost impossible.

As with gems, they are excessively abundant, with many major industrialized nations holding significant stockpiles and having established contracts with the leading producers for rainy days. Making it less likely for them to randomly engage new suppliers outside their contracts.

Zimbabwe Must Not Bank On Diamonds

The above factors are some reasons why some of us are advocating that the Zimbabwean government takes diamonds off it’s strategic minerals list, liberalizes the market, allows Zimbabwean diamond cutters to get allocations so that we can develop a cutting industry in the country ASAP.

By so doing creating jobs, building expertise in the industry, generating returns and savings in this small window where natural diamonds still have a demand because they might not have for much longer.


In summary, gem diamonds have no real intrinsic value besides the artificial value fostered by cartels controlling supply and the marketing hype generated around them.

Hence, it’s unlikely that Zimbabwe could have injected $21bil in rough diamonds on the global market, $15bil of them illicitly in a ten year period without being caught out by the cartel and global prices falling.

Industrial diamonds are too bulky to have been smuggled illicitly across boarders without detection. Moreover, Zimbabwe would have had to produce and sell world record volumes of them to make up for the amount in question.

Additionally, diamonds have very elastic demand, meaning too much rough on the market would have resulted in a buyers market in which too many diamonds were chasing little money. This would have resulted in a reduction in price rather than the 30% increase we saw over the decade in question.

The Billion Dollar Questions

This brings us to the billion dollar questions that if Zimbabwe put $15billion of illicit diamonds on the market, in contravention of KPC regulations. Where did they go? Why did they not affect global rough diamond prices over the period? And why didn’t KPC detect the infringement and suspend the country for infringing it’s regulations?

The moment we have these facts and questions on the table. You begin to realize that the story of Zimbabwe pushing $15 billion of stolen rough diamonds onto the international market with an additional $6 billion that went in through the proper channels over the past ten years. Is a strawman’s argument with no scientific basis.

Eleven Reasons To Remember About Zim Diamonds

To sum this long assay up neatly. Here are the eleven reasons why Zimbabwe is unlikely to have lost $15 billion on stolen diamonds over the ten year period in question.

1. The diamond industry is controlled by a very stringent cartel called KPC that monitors and audits all certified diamond mines across the world to control output and protect the global prices.

Zimbabwe would not have been admitted to the Kimberley Process without consenting to monitoring and putting security measures to secure its diamond output to prevent the pilferage and leakage of substantial amounts of diamonds onto the market without detection.

2. The country would also have been suspended from the KPC and its diamonds labeled blood diamonds once it was discovered to have put substantial amounts of purloin diamonds on the market.

3. The world prices of rough diamonds would not have seen a 30% surge in the same period 2006-2016 in which the stolen diamonds are purported to have entered the market.

4. Instead prices would have fallen probably by the same quantum because of the 15% increase in rough supply on the market in time of a recession.

5. An injection of $21bil of Zimbabwean diamonds over a ten year period on the rough diamond market would have made Zimbabwe the biggest diamond producer in the world.

This is considering that $21bil in rough diamonds at the average price of $57/carat would mean Zimbabwe produced more than 400mil carats to surpass Russia and Botswana as the biggest rough producers in the world.

6. Such an increase in diamond production should have seen a significant and commensurate rise in demand for:

• dump trucks,

• diamond mining equipment,

• processing plants,

• sorting equipment,

• inward immigration of the most skilled technicians in the diamond industry,

• semi skilled mine labor,

• demand for accommodation in Manicaland

• fuel demand

• demand for consumer products due to increase employment and income in the area.

Which we did not see over the period.

7. Zimbabwe would have become the biggest employer in the international diamond industry. Meaning that our unemployment numbers would have been significantly dented.

8. We would have also seen a ripple effect in the number of international diamond trading companies, cutters and valuers opening shop in Zimbabwe to process the product and harness the windfall.

9. Security companies transporting diamonds and protecting diamond dealers would have proliferated the market.

All you have to do is go to South Africa, Congo and Sierra Leone to see the number of Lebanese, Jewish diamond traders and foreign security companies in those countries to understand the trends that develop in a country with a huge diamond industry

10. Diamond banks and vaults would have sprang up in Mutare and Harare.

11. Coinciding with that should have been a significant increase in alluvial tailing dumps to form mountains of at least 200mil tonnes of gravel around the diamond mining areas as we see in Johannesburg due to gold mine dumps.

This considering that Zimbabwe is said to have had a yield of 2 carats per tonne of soil moved for each carat produced according to Eddy Cross.

The numbers clearly don’t tally.

Rutendo Bereza Matinyarare.

© 2019 by Frontline Studio

My mission!

As a man I seek to die having fulfilled my destiny to humanity, not having consumed much.

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