African Diamond Producers Association (ADPA) has expressed its displeasure over the G7’s rough diamond trade restrictions outside of the Kimberley Process Certification Scheme (KPCS) regulations.
In a letter addressed to KPCS chairperson Ahmed Bin Sulayem, ADPA executive director Ellah Muchemwa said the move will have a detrimental impact on the whole diamond industry.
“The expedited restrictions by the G7 and the European Union (EU) threaten to have negative direct and indirect economic consequences to the diamond industry throughout the supply chain from mine to finger, resulting in a “lose-lose situation" for all,” she said.
”This is happening against the backdrop of a global macroeconomic downturn exerting pressure on the sales of diamonds that have already resulted in an inventory build-up and up to double-digit price reduction for key sizes across the board since 2023.”
Muchemwa said that in the absence of proper consultation with African producers, they concluded that the G7 restrictions on diamonds would disrupt the current supply chains and the fundamental business model of the diamond sector by introducing segregation requirements.
She said the G7 restrictions will also bring extra costs on all stages, from mining to retail, by the introduction of unilaterally longer and more complicated procedures for processing trade transactions, especially cross-border ones, including difficulties with bank payments and financing, insurance, and logistics.
“These factors will increase the turnaround time of processing and transacting diamond businesses, disrupting the industry's production cycle and profits,” she said.
“The negative impact is more obvious in the case of creating a single node bottleneck that needs to be passed at every stage of diamond 'transformation with no clear understanding of how the verification will be done on the first rough diamond, then the same polished diamond derived by said rough diamond, then same diamond set in a jewellery piece.”
Mathew Nyaungwa, Editor in Chief of the African Bureau, Rough&Polished
