Forging a Sustainable Future: Russia-Africa Collaboration in the Diamond Industry

The Russia-Africa Economic Forum, held on October 23-24, 2019, in the vibrant city of Sochi, Russia, served as a landmark event for strengthening geopolitical and economic ties between Russia and the African continent. Coinciding with the inaugural Russia-Africa Summit, this significant gathering brought together heads of state, government officials, and leading industry representatives from across both regions. Among the critical sectors under discussion, the global diamond industry took center stage, with a dedicated session meticulously co-organised by ALROSA, the world’s largest diamond mining company. Titled ‘Russian-African Collaboration in the Diamond Industry’, this session underscored the profound strategic importance of cooperation between these two major powerhouses, which collectively account for approximately 75% of the world’s rough diamond production. The discussions aimed not only to highlight existing synergies but also to chart a collaborative path towards the sustainable development and ethical evolution of the entire global diamond value chain.

Addressing Key Challenges and Shaping Industry Prospects

The diamond industry, while globally significant, faces a complex array of challenges, from fluctuating market demands to evolving consumer expectations regarding ethical sourcing and environmental responsibility. Participants in the ‘Russian-African Collaboration’ session engaged in robust discussions, meticulously outlining these key challenges and exploring pragmatic, collaborative solutions. The dialogue extended beyond immediate concerns, delving into a shared vision for the diamond industry’s long-term prospects. A core focus of the session, as highlighted by ALROSA, was the indispensable role of industry organizations in reinforcing consumer trust and confidence in diamonds. Furthermore, there was a strong emphasis on the collaborative effort required to establish and uphold robust, responsible supply chains for ethical rough diamonds sourced from Africa – a region pivotal to global diamond production. This collaborative approach aimed to ensure that the journey of every diamond, from mine to market, upholds the highest standards of integrity and social responsibility.

A Gathering of Influential Leaders

The calibre of speakers at the session reflected the paramount importance attached to Russian-African collaboration in the diamond sector. The esteemed panel comprised a formidable lineup of government ministers, industry titans, and heads of key organizations, signaling a strong commitment from both sides to drive meaningful change. Key Russian figures included Dmitry Kobylkin, Minister of Natural Resources and Environment; Alexei Moiseev, Deputy Finance Minister; and Yury Trutnev, Deputy Prime Minister and Presidential Plenipotentiary Envoy to the Far Eastern Federal District. Representing the host co-organizer, Sergey Ivanov, CEO and Chairman of the Executive Committee of PJSC ALROSA, offered crucial insights from the perspective of the world’s leading diamond producer.

African representation was equally robust, featuring Diamantino Pedro Azevedo, Minister of Mineral Resources and Petroleum of Angola; Winston Chitando, Minister of Mines and Mining Development of Zimbabwe; and Tom Alweendo, Minister of Mines and Energy of Namibia and Chair of the African Diamond Producers Association (ADPA). These high-level delegates brought invaluable perspectives from diamond-rich nations, highlighting their commitment to leveraging the industry for sustainable national development. Further enriching the dialogue were global industry leaders such as Stephane Fischler, President of the World Diamond Council (WDC); Killian Ukama, Board Chairman of the Zimbabwe Consolidated Diamond Company (ZCDC); Jean-Marc Lieberherr, CEO of the Diamond Producers Association (DPA); Marcus ter Haar, Managing Director of Okavango Diamond Company; Kennedy Hamutenya, CEO of Namib Desert Diamonds (NAMDIA); and Sandile Nogxina, Special Adviser to the Minister of Mineral Resources and Energy of South Africa. The diverse expertise gathered underscored the comprehensive and multifaceted nature of the discussions.

Navigating Evolving Consumer Demands and Ethical Imperatives

In his impactful address, ALROSA CEO Sergey Ivanov provided a candid assessment of the prevailing market conditions, noting that the current challenges in the diamond sector are inextricably linked to a profound transformation in consumer perceptions. Modern consumers are increasingly sophisticated and ethically conscious, prioritizing not only the aesthetic qualities and intrinsic value of diamond jewelry but also the underlying responsible business practices of those who bring them to market. The demand for transparency, ethical sourcing, and demonstrable social and environmental responsibility has become a non-negotiable aspect of purchasing decisions.

“We should focus on fundamental factors that lead to the evolution of the entire diamond industry,” stated Ivanov, emphasizing the need for proactive adaptation. He further elaborated, “The modern society imposes increasingly stringent requirements on us. Warranties of transparency and responsible sourcing and business practices, respect for human rights, minimizing the environmental impact, social and economic development of the regions of operations are important today as never before.” This statement eloquently captures the paradigm shift within the industry, where ethical conduct and sustainable operations are no longer mere add-ons but fundamental pillars of long-term success and consumer trust. The ability to guarantee these aspects across the entire supply chain is now crucial for maintaining the allure and desirability of diamonds.

Moderation and the Call for Global Partnerships

The session was expertly moderated by Iris Van der Veken, Executive Director of the Responsible Jewellery Council (RJC), an organization dedicated to promoting responsible ethical, human rights, social, and environmental practices throughout the jewelry supply chain. Van der Veken’s moderation brought an essential layer of expertise and independent perspective to the discussions.

Expressing her appreciation, Van der Veken remarked, “It is an honor to moderate the discussion on the Russian-African collaboration in the diamond industry. We thank ALROSA – certified member of RJC – for taking leadership. This is a great opportunity to unite and act, changing the situation for the better. Global partnerships are the way forward – to achieve peace, sustainable economic growth and development, and transform the lives of people.” Her words resonated with the overarching theme of the forum, highlighting that meaningful progress in complex global industries such as diamonds can only be achieved through concerted, collaborative efforts that transcend national and corporate boundaries. The RJC’s involvement also underscored the commitment to international standards and best practices, providing a framework for the responsible actions discussed.

Pillars for a Sustainable Diamond Industry

Following the comprehensive and insightful discussions, participants collectively formulated a crucial list of basic principles. Adherence to these principles is deemed vital for fostering the sustainable development of the global diamond industry, ensuring its longevity and continued positive impact. ALROSA detailed these fundamental points, which serve as a roadmap for future actions and policy frameworks:

Sharing Best Practices in Human Resources and Health & Safety: This principle emphasizes the importance of exchanging knowledge and expertise in developing local workforces, ensuring fair labor practices, providing professional training, and upholding the highest standards of occupational health and safety within mining operations. This not only protects workers but also contributes to local economic development through skill enhancement and job creation.
Gradual Reduction of Environmental Footprint: Committed to environmental stewardship, this principle advocates for the adoption of advanced, eco-friendly mining technologies and operational practices aimed at minimizing the ecological impact of diamond extraction. This includes efforts in land rehabilitation, responsible water management, waste reduction, and energy efficiency, ensuring that the natural environment is preserved for future generations.
Supporting Communities in Regions of Presence: Diamond mining operations often occur in remote areas, making community engagement and support paramount. This principle focuses on initiatives that contribute directly to the social and economic well-being of local communities, such as investing in infrastructure, education, healthcare, and local businesses, fostering a symbiotic relationship between mining companies and the people in their operational vicinities.
Strengthening Regulatory Mechanisms of International Diamond Trade: Robust regulatory frameworks are essential for maintaining the integrity of the global diamond trade. This principle calls for enhancing international cooperation and enforcement to prevent illicit trade, ensure transparency, and combat any activities that undermine the ethical standing of diamonds.
Ensuring Complete and Clear Product Disclosure and Differentiation with Lab-Grown Diamonds: With the emergence of lab-grown diamonds, clear and honest disclosure is more critical than ever. This principle mandates that consumers receive comprehensive information about the origin and characteristics of their diamonds, clearly distinguishing natural diamonds from their lab-grown counterparts, thereby protecting consumer confidence and the unique value proposition of natural diamonds.
Building of Responsible Supply Chains: This principle underpins the entire ethical framework, focusing on the establishment of transparent, verifiable, and responsible supply chains from mine to retail. It involves due diligence at every stage, ensuring that diamonds are sourced without conflict, in compliance with human rights, and with respect for the environment and local communities.
Promoting Generic Marketing for Polished Diamonds: Generic marketing campaigns play a crucial role in maintaining and enhancing the overall desirability and emotional value of diamonds. This principle encourages collective industry efforts to promote the enduring allure, rarity, and symbolic significance of polished diamonds to a global audience, thereby stimulating demand across the entire market.

These fundamental principles are not merely aspirational; they represent a concrete framework for action. ALROSA noted that the practical application and implementation of these principles would be a central theme at forthcoming international diamond-related events. Significantly, these discussions will be advanced during Russia’s chairmanship of the Kimberley Process in 2020, positioning these collaborative principles at the forefront of global policy development for ethical diamond trade.

ALROSA’s Strategic Commitment to African Diamond Production

While ALROSA’s primary operations are concentrated within Russia, the company has long recognized Africa as one of the world’s most promising regions in terms of untapped diamond reserves and production potential. This recognition is not merely theoretical; ALROSA has established a tangible and strategic presence on the continent, particularly in Angola and Zimbabwe, reaffirming its commitment to fostering mutually beneficial partnerships within these diamond-rich nations.

In Angola, a country renowned for its significant diamond deposits, ALROSA holds a substantial 41% stake in Catoca Ltd Mining Co. This venture, established with Russian participation back in 1993, stands as the largest diamond miner in Angola, symbolizing a long-standing and successful collaboration. Furthermore, ALROSA has deepened its engagement through the Kimang exploration joint venture with Angola’s national diamond-mining company, ENDIAMA. This partnership is crucial for uncovering new deposits and expanding the nation’s diamond production capabilities, bringing advanced geological expertise and technology to the region.

Expanding its African footprint, ALROSA established an affiliated company in Zimbabwe, ALROSA (Zimbabwe) Limited, in 2018. This move paved the way for a more significant partnership, culminating in July 2019 with the signing of an agreement between ALROSA and the Zimbabwe Consolidated Diamond Company (ZCDC). This agreement formalized the creation of a joint venture (JV) specifically tasked with prospecting, exploring, and developing new primary diamond deposits across Zimbabwe. Such strategic investments not only diversify ALROSA’s global portfolio but also represent a significant infusion of capital, technical expertise, and responsible mining practices into these African economies, promising to unlock new avenues for economic growth, job creation, and sustainable development within the local communities.

The Russia-Africa Economic Forum session on the diamond industry ultimately served as a powerful testament to the shared vision of sustainable and ethical development that unites these key global players. By fostering open dialogue, defining common challenges, and establishing a robust set of guiding principles, both Russia and African nations, led by entities like ALROSA, are actively shaping a future where the diamond industry thrives responsibly, delivering economic prosperity while upholding the highest standards of integrity, transparency, and social good. The continued collaboration promises to strengthen consumer confidence and ensure the enduring sparkle of natural diamonds for generations to come.