The Kimberley Process was initiated in 2000. This international community was named after the town of Kimberley, South Africa, where the first international conference on “conflict diamonds” was held. The main task of the Kimberley Process is to resist penetration to the world market of the so-called “blood diamonds” illegally mined and funneled to finance regional conflicts and international terrorist groups. According to this international agreement, all diamonds must be furnished with certificates proving that they were mined outside war zones. J. Oppenheimer, heading the South African division of De Beers, said that before the Kimberley mechanism turned its gears conflict diamonds sales accounted for four percent of the market, while now it is one percent. The Kimberley Process Certification System (KPCS) comprises 48 participants (including the European Economic Community considered as one participant) from 74 countries. Due to the Kimberley Process the diamond business is becoming more transparent because of opened information on output and sales of rough diamonds in the countries participating in the Process, which earlier was not available.
Taking into account that currently the amount of diamonds avoiding certification is less than one percent of their world output, it should be said that the Kimberley Process plays a positive role in bringing mining and sales of rough diamonds out of illegal turnover. Any further development of this community may be seen in introducing certification for diamond jewelry cutting and selling operations, which will permit to retrieve an even greater part of the diamond business from shady transactions and facilitate fair distribution and competition on this market.
Within the frames of the Kimberley Process the Russian Ministry of Finance started to publish statistic data on natural diamonds output and their export and import structure. Table 1 contains data relating to the output and sales of diamonds in the Russian Federation from 2004.
Table 1
Output and export of diamonds in the Russian Federation in 2004-2008
|
Year |
Diamond output |
Diamond export | ||||
|
Weight, mn ct |
Price, USD mn |
Average price, dollar/carat |
Weight, mn ct |
Price, USD mn |
Average price, dollar/carat | |
|
2004 |
38.866 |
2 205.4 |
56.74 |
33.138 |
1 324.4 |
39.97 |
|
2005 |
38.001 |
2 531.3 |
66.61 |
37.247 |
1 687.7 |
45.31 |
|
2006 |
38.361 |
2 574.3 |
67.11 |
35.011 |
1 745.9 |
49.87 |
|
2007 |
38.291 |
2 625.1 |
68.56 |
28.875 |
2 022.5 |
70.04 |
|
Q1, 2008 |
Not available |
Not available |
Not available |
6.650 |
414.8 |
62.38 |
The analysis of the data above proves that the average U.S. dollar price of diamonds mined in Russia in 2005-2007 actually remained on one and the same level. It is noteworthy that changes in the price for diamonds exported from the Russian Federation in the period under review were most likely stipulated by qualitative changes in the characteristics of exported rough and not by increased prices for natural diamonds.
In 2008, the price for diamonds being mined is expected to rise significantly, according to forecasts of most analysts. Some experts believe that diamond prices in the nearest several years may surpass any historical maximums, since in recent years they stayed approximately on one level, whereas prices for other mined minerals during this period grew manyfold.
Yuri Danilov, Senior Research Fellow, Department of Rough and Polished Diamonds Complex Economy, Institute for Regional Economics of the North (Federal State Scientific Entity)
