RAPAPORT... Democratic Republic of the Congo (DRC) Deputy Minister of Mines Victor Kasongo refuted reports that he said the newly formed African Diamond Producers Association will be looking to control the diamond markets.
In an April 21, 2007 report, Bloomberg quoted Kasongo as saying, "We will establish the OPEC of diamonds. We will form united diamond policies, so that we have more power on the international arena.”
Kasongo told Rapaport News on April 23, "I was misquoted."
"I made no reference to pricing. We are looking to expand the region's activity in the diamond industry to create employment through it," he said.
Kasongo told Rapaport that an OPEC type structure would have been very powerful, but this is not the intention of the association which is being formed this week.
Representatives from the DRC, South Africa, Zimbabwe, Angola, and Namibia will meet April 27 and 28 in Luanda to work out the technical aspects of the syndicate and the respective countries' ministers will seal its establishment at an April 30 meeting.
Unlike OPEC, whose 12 oil producing member nations are able to exert influence on oil prices, Kasongo said the underlying goal of the meeting will be to brainstorm ways to expand Africa's role in the diamond industry beyond that of mining.
The six nations participating in the Luanda meetings make up for around 51 percent of the world's diamond carat production, according to the most recently published Kimberley Process statistics for 2005. The meeting comes as interest from those countries has increased to tap into markets beyond production.
"We want to cut competitively and learn," Kasongo said. "Not to control the market, but to make Africa an important player throughout the diamond chain, meaning from producing to cutting and polishing to marketing."
On a more practical level, he said he hopes a training timetable will be achieved from the meetings to teach diamond cutting and polishing skills through the region, particularly the DRC.
Meanwhile, Belgium Polished Diamond Dealers Association president Andre Gumuchdjian said he was confident the cut and polished production in Africa does not threaten Antwerp's position as a leading polishing center.
"Beneficiation will change the way the diamond industry will look like and we have been predicting this for some time now," Gumuchdjian said. "But I think that Belgium companies are entrepreneurial enough to ensure that diamonds continue to pass through Antwerp."
Gumuchdjian added that while he understands why Africa's diamond-rich countries are making the effort to move into the polished arena, he hopes they would be reasonable in their approach.
"They need to realize that some items are not economically viable to be polished in Africa," he said, using the example of smaller goods that flow to India and more expensive stones, which would be more expensive to polish in new centers. "They need to devise an economically viable guideline to make it interesting for all."