Truth matters

| August 6th, 2019

Truth matters
"Truth matters"

Much has been said about the relative merits of natural diamonds and laboratory-grown diamonds (LGDs) when it comes to their environmental impact. The DPA published in May a report produced by TRUCOST ESG Analysis, part of S&P Global, which quantified the annual socio-economic and environmental impact of the DPA members’ diamond mining activities (www.total-clarity.com). It is the first time, according to TRUCOST, that companies representing three quarters of an industry ask a third party to quantify and report on their collective impact.

The media and the industry have taken a keen interest in the environmental footprint analysis conducted by TRUCOST and in the CO2 emission comparison between natural diamonds and LGDs contained in the report. A 2014 report written by Frost & Sullivan has been widely quoted by LGD producers to refute the TRUCOST analysis. It is unfortunate that this data debate (which I will need to go back to later in order establish some simple truths), has almost totally overshadowed the main findings of the TRUCOST study, and which the industry should take pride in, which is that large scale diamond mining creates over $16 billion of net value every year, most of which is created within the local mining communities and producing countries.

Benefits created for local communities have been quantified as follows: $3.9 billion linked to salaries and benefits paid to the 77,000 employees of DPA operations. $6.8 billion linked to the local sourcing of goods and services. $3 billion linked to taxes, dividends, and royalties paid to local and national governments. It is safe to assume that a large portion of government payments are re-invested in education, health and infrastructure. Botswana, Yakutia and Canada are good examples of responsible management of diamond proceeds. This means essentially that the bulk of the value created by large scale diamond mining activities benefit directly or indirectly local communities every year, to the tune of $12 billion or more. In comparison, dividends paid to private investors in 2016 were less than $500 million. It is worth remembering that the wholesale value of all polished diamonds traded in a year is about $25 billion. Very few industries can boast such a significant socio-economic impact relative to their size and this should be a cause for pride not only for miners, but for all in the diamond trade.

Jean Marc Lieberherr is CEO of the Diamond Producers Association.

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Source Idexonline

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