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Illegal Mining pp 185–203Cite as

Palgrave Macmillan

Diamond Mining, Organized Crime, and Corruption

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Abstract

This chapter provides a critical analysis of the first phase of the diamond pipeline and its vulnerability to organized crime and corruption. Illicit mining, namely mining outside of the control and monopoly of the international mining companies, is a result of complex bureaucratic conditions and power relations between local miners and corrupt state officials. The criminalization and bureaucratization of the mining industry create legitimacy for international companies with deep pockets to control and gain power in the countries where minerals are extracted. The role of transnational organized crime and its cooperation with the legitimate actors that facilitate illegal diamond mining is also analyzed.

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Notes

  1. 1.

    One of the biggest recent fraud scandals was that of Gujarati diamond trader Nirav Modi, India’s “Diamond King,” who was arrested in London in March 2019 following an investigation by the Confederation of British Industry (CBI). In cooperation with several employees of the Punjab National Bank, for seven years he managed to manufacture sham transactions, defrauding the bank of USD 40 million, in what the media called “The Great Indian Bank Robbery” (Pal, 2019).

  2. 2.

    Today the Indian beds seem to be exhausted (Dickinson, 1965).

  3. 3.

    It remains as such to this day.

  4. 4.

    With 35.2 million carats valued at USD 5.7 billion in 2018, De Beers is an industry-wide leader in terms of the quantity of diamonds produced (African Mining Review, 2018).

  5. 5.

    Rio Tinto mining company also owns the Murowa Diamonds Mine in Zimbabwe and the Diavik Diamond Mine in Canada.

  6. 6.

    The Indian and Brazilian mines are alluvial.

  7. 7.

    The stages include: mining, trade by local diamond dealers, and transport to big cities for selection and certification; transportation across borders; trade of rough diamonds at the diamond bourses (e.g., London, Antwerp, Ramat Gan); followed by cutting and polishing; and finally, sales at jewelry stores (around the world) (Siegel, 2009).

  8. 8.

    In this case a high ranking security official from one of the Argyle mines in Australia, together with his companions, was recruited by an organized crime group to steal rough diamonds from the mine, causing a loss of USD 30 million (Tailby, 2002, p. 4).

  9. 9.

    Estimations done by my respondents (2016, Antwerp).

  10. 10.

    These are different names for the same phenomenon: garimpeiros, for example, in Angola and Brazil; and creausers in West and Central Africa.

  11. 11.

    In Congo, for example, less than 10% of the miners were officially registered (Diamond Industry Annual Review, 2004).

  12. 12.

    Fines of ZAR 7000 (approx. USD 500) are common, which is nine times more than the national poverty line, or two years in jail.

  13. 13.

    Personal communication, summer 2003.

  14. 14.

    Despite the use of advanced technology to control miners, smuggling continues. Thus in 2018, for example, Angolan authorities launched “Operation Transparency” to fight diamond smuggling, which included cancelling licenses of 122 small companies engaged in diamond exploration (The Diamond Loupe, 2019).

  15. 15.

    In Resolution 1306 (as of July 5, 2000) the United Nations Security Council (UNSC) decided to prohibit the direct or indirect import of rough diamonds from the country (UNSC, 2000).

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Authors and Affiliations

  1. Willem Pompe Institute, Utrecht University, Utrecht, The Netherlands

    Dina Siegel

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  1. Dina Siegel
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Correspondence to Dina Siegel .

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Editors and Affiliations

  1. Department of Political Science, John Jay College of Criminal Justice, City University of New York (CUNY), New York, NY, USA

    Yuliya Zabyelina

  2. Willem Pompe Institute for Criminal Law and Criminology, Utrecht University, Utrecht, Utrecht, The Netherlands

    Dr. Daan van Uhm

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Siegel, D. (2020). Diamond Mining, Organized Crime, and Corruption. In: Zabyelina, Y., van Uhm, D. (eds) Illegal Mining. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-46327-4_7

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  • DOI: https://doi.org/10.1007/978-3-030-46327-4_7

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