Diamonds, Development, and Dollars: A Case Study on a Newly Founded Gemological Lab in Botswana Aiming at Sustainable Community Empowerment

Abstract

Drawing on a theoretical framework published elsewhere (Serdari 2016), this paper presents the development of a model gemological lab in Botswana (designed and implemented by Ms. Giovanna Federico, Ph.D. whom the author interviewed). The work poses questions on the nature of diamonds mining and its challenging relationship with natural resources and showcases best practices in reinforcing a sustainable value chain management by focusing on the following: production processes; employee relationships; employee training; and other related organizational issues. In other words, this case study touches on the idea of sustainable diamond mining through social and environmental performance. Luxury items such as quality diamonds are valued not only according to the Gemological Institute of America (GIA) 4Cs (Color, Clarity, Cut, Carats) but also based on the entire production process as previously published by the author in her piece on luxury production. The proposed case study showcases how luxury production processes reinforce initiatives on sustainability particularly in relation to economic empowerment. It also suggests that a fifth C, standing for Creator, would advance sustainability in the diamond industry by slowing down the process.

Appendix: Interview with Giovanna Federico, Ph.D. Gemological Institute of America Certified Gemologist

TS: Giovanna, you were recently invited to travel to Botswana and assist in setting up a gemological lab. What type of lab is it?

GF: This new lab, by Gemological Science International originally from New York, is focusing on cut and polished diamonds exclusively. It is set up so that employees analyze each single gem and generate a report stating its unique characteristics.

TS: How does this relate to the entire value chain of diamond mining?

GF: While the process may differ depending on where the mine is located we can safely assume that operations follow a prescribed sequence from mining the rough diamonds that are extracted from their natural Kimberlite. Subsequently, rough diamonds are sorted by quality and size. Then they are cut. This is a very important step because each rough diamond requires a different cut. That allows the rough to be cut according to its natural characteristics. By doing so, this process emphasizes the natural beauty of the stone. Cutting is followed by polishing, which enhances the diamond’s sparkle. It is only after all these steps have been completed that the gems reach the gemological laboratory. There, they are analyzed and assigned a certificate that lists the diamond’s grade. This grading system is based on the “Four Cs” standard (clarity, cut, color and carat weight).

TS: You have long experience in these processes. Why do you think that Botswana offers a challenge to mining companies? Why would they need an expert like you to assist in organizing the lab? What is different about Botswana?

GF: Botswana is a very interesting place. It is a country with great ambition. Locals are business-oriented and eager to learn about new processes and anything that will connect them quickly to the global economy. Locals are accustomed to seeing a lot of foreigners in Botswana thanks to the diamond industry that is thriving there. We all know that Botswana has traditionally rendered great numbers of excellent quality diamonds and a few of substantial number of carats. The diamond industry, therefore, is fundamental in moving the local economy forward. Simply put, it is the main source of income for a large majority of the population. This is not to say that the relationship between Batswanas and foreigners, especially foreign business entities, is not occasionally tense, especially when things are not handled properly, or when Batswanas feel shortchanged. Employees at these foreign mining companies are well aware of the power they have through organized, strong unions. In my experience, the local population is of a moderate temperament and peaceful attitude. But we cannot forget how close their reality is to their recent experience of the apartheid that dominated their lives for a very long time. Also, in spite of the general progress in business, the constant flow of foreigners and Batswanas’ exposure to diversity, Botswana is still a developing country with tremendous challenges.

TS: This means that arriving in Botswana to set up procedures in a gemological lab may have been a cultural shock for you.

GF: There are certainly enormous differences in culture, in daily modes of life, and education between myself and the people I came to train. I try to always take these into consideration to create a positive and productive atmosphere conducive to learning.

TS: Other than cultural differences, what are the challenges present in Botswana in particular?

GF: The biggest challenge is shortage of water. Most of the country’s rivers have dried up—the entire country is in a state of drought. The government is working with neighboring countries facilitating the flow of water back into Botswana from a variety of sources. This is no small feat.

TS: What are the consequences of the water shortage for daily life and businesses?

GF: When I arrived [in March of 2015] and throughout my stay [that ended in June of 2015] the water supply was interrupted from 9 am to 6 pm four times a week both in residential and business addresses. There are private people and businesses with funds to invest in large water tanks to be installed in proximity to their residencies or offices.

TS: I understand there can be no diamond mining without water.

GF: Yes, that is correct. Diamond mining relies heavily on the use of water, especially upstream when the Kimberlite is crushed and washed in order to extract the rough diamonds. Water is necessary at various stages of the mining process.

TS: Could you tell us more about the process itself?

GF: I had the chance to visit one of the biggest mines in South Africa on a different trip. The engineer who took me to 740 m underground explained to me how the business is organized. Mining companies invest a vast amount of money in research primarily and, subsequently, digging and exploring. Once the Kimberlite pipes have been located and confirmed, tunnels are dug out. These tunnels need to be supplied with water and electricity. Ironically, diamonds, which represent one of Africa’s important natural resources, require such large quantities of other natural resources (water and electricity) that are pretty scarce in that entire region. To come back to the actual mine, I noticed that the tunnels were excavated from above, laterally, and underneath as well. It is a very complex engineering process. Once the tunneling system has been completed, the developer builds an entire village around the mine. This is a full-service urban capsule with shops, restaurants, and medical facilities all of which are designed to accommodate the miners and their families.

TS: How are the conditions underground?

GF: Conditions underground have improved from the past. Today, developers build lounges and resting areas below ground for the hundreds of people who work there daily.

TS: The industry has turned a little bit more humane…

GF: Yes, definitely. It is an industry for the modern world. However, in Botswana the challenges are numerous. In addition to water shortage, there is a shortage of electricity. This greatly affects the operations below and above ground. Electricity is cut at least once a week. Networks require electricity as well. At the lab, our Internet connection would be interrupted and force the staff to abandon their tasks or repeat work that they had started. This happened multiple times per week, every week. Therefore, we need to think of these businesses within the context of a third world economy and appreciate the extra effort that goes into cutting, polishing, and grading these diamonds that, we know, will end up at a retailer’s window on Fifth Avenue.

TS: You spoke of the Internet and computers. How automated are these gemological labs?

GF: Automated systems are already being considered as an integral part of the process. However, while labs rely on them above ground, underground automation has not happened yet. Mining companies are investing heavily in research of automated systems that will eventually replace the miners who work underground. This will have life changing consequences for the locals and this is why I believe in helping them acquire knowledge that will make them employable in operations above ground. The human and social repercussions of this development are not been discussed openly. I believe that they present both a threat against Batswanas’ livelihood and a remarkable opportunity for them to be prepared for more sophisticated, and certainly more comfortable, types of employment above ground.

TS: What were the conditions you faced at the lab when you first arrived?

GF: At that point, the lab was very basically developed. There was one staff person, a local young lady who had not been fully trained. Her work was inconsistent and relied on a very rudimentary technological system. Gemological labs required sophisticated machinery both to identify the traits of each gem and to allow for a seamless workflow that allows each expert to be fully employed all the time. None of this existed before my arrival in March 2015.

TS: Could you give us more details on this type of technology?

GF: The machinery required is very specific. A lab must be equipped with the following:

• 1. Sarine scan: it’s a scanning instrument that reports measurements of each single diamonds This information will be part of the final report when the diamond leaves the lab.

• 2. A diamond scale: This is a very sensitive and precise instrument that focuses only on the carat weight of the stone. Periodically it needs to be re-calibrated and cleaned.

• 3. A high-resolution scope to analyze the internal characteristics of the diamond. It allows gemologists to assess the stone’s clarity grade.

• 4. To assess the color grade a lab needs the grading light cabinet, a special box which mimics natural daylight.

• 5. A fluorescence box determines the level of fluorescence or the lack of it in a diamond.

These are the basics of a diamond-grading lab. In other departments, such as the one determining the stone’s chemical composition and the origin of color, there are other types of essential equipment, without which a lab cannot be considered reputable. Yet, not all labs are following these standards and, unfortunately, the staff at these other labs are not able to determine the grades of the stones and their more complex traits. They limit their authority in determining authenticity. This is not nearly enough for diamonds that enter the global trade.

TS: Could you explain how you modernized this lab?

GF: I studied the systems that had been installed and made sure I knew how to troubleshoot anything related to technology. I also supervised staff while they were grading diamonds. I organized the lab’s operations and procedures while also assigned and monitored electrical functions. I designed and implemented new office systems for maintaining the lab’s efficiency. This included making sure that procurement and set up of equipment (Sarin machine, scopes etc.) was timely and up to standards. I supervised the staff by actively measuring their results against industry standards and by making the necessary adjustments. I also acted as a liaison between the lab and headquarters providing them with summary reports and up to the minute information on how the systems supported or prohibited the staff from doing their work. In the process, I recruited a number of new staff, which I found to be the most satisfying part of my assignment. I trained them on each of the machines and explained to them the nuances of color, clarity, polish, and symmetry in grading the stones. At the end of the process, in June 2015, I left the lab with fully trained staff who could be employable in any lab, even in the most high-tech facilities in developed economies. Beyond their basic training, the employees were invited to participate in a series of educational workshops I designed and organized as well as encouraged to develop personal networks and to participate in professional societies. I was personally interested in both leaving an exemplary lab behind at the end of my visit and in having trained people who would be able to seek new opportunities within the international community of the diamond mining industry and trade. When I left Botswana, I had four fully trained locals who were working at the lab and the office and were generating a workflow of about 150 diamonds on a daily basis.