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ECONOMIC FALLOUT MAY ECLIPSE HEALTH EFFECTS IN AFRICA’S INFORMAL DIAMOND MINING SECTOR

 

While the COVID-19 is certainly a threat to the artisanal diamond mining communities in African, the economic effects could outweigh the health effects, reports the World Diamond Council (WDC) in its latest newsletter. 

Through the middle of May 2020, the number of confirmed COVID-19 infections in sub-Saharan Africa, where the major part of the continent’s formal and informal diamond mining sector is located, is relatively low, the WDC notes. And, while is almost certain that the official data provided is considerably lower than what they are in reality there are reasons why sub-Saharan Africa may be less affected. One being the median age of the population, which is under 20, a critical factor in a disease that has proven to most deadly among the older sectors of population. 

What should not be underestimated is the experience of certain African countries in dealing with infectious diseases, including diamond-producing countries like Liberia, Sierra Leone, Guinea and the DRC, all of which successfully contained the Ebola epidemic earlier this decade, the WDC report notes. 

Indeed, on February 3, 2020, relatively soon after the existence of the novel coronavirus was made public by the World Health Organization, the Africa Centers for Disease Control and Prevention established the Africa Task Force for Novel Coronavirus (AFCOR), to oversee preparedness and response to the global epidemic. At the time there were no confirmed cases of COVID-19 in Africa.

LOCKDOWN BRING FLOW OF GOODS TO A HALT

But economic fallout is likely to be profound. As jewelry sales in the major consumer markets plummeted, mainly as a result of government-imposed lockdowns and calls to the public to stay at home, the movement of goods through the distribution chain ground to a near halt.

So as not to overload the system, major mining houses reduced output. De Beers announced a revised production for 2020 guidance of 25 million carats to 27 million carats, down from the 32 million carats to 34 million carats that had been announced earlier. These moves coincide with reports from India that many diamond-cutting operations are instituting moratoriums on rough-diamond imports, to maintain balance in the pipeline.

But the types of discipline that can be imposed in the industrialized mining sector and the diamond production centers are considerably more difficult to achieve in the informal mining sector, particularly when a large number of people are entirely dependent on the revenues they generate for their daily livelihood, notes the WDC report.

 

A tailor contracted by De Beers subsidiary Debswana to sew reusable cotton face masks, which will be distributed to law enforcement officers, as well as other essential services workers and communities around the company’s operations in Botswana.

With the spread of the COVID-19 coronavirus, African government have been issuing health instructions, such as this banner issued by the South African health authorities.

ARTISANAL MINING OPERATION HARD HIT

The report highlights a communique by the Zimbabwe Environmental Law Association (ZELA) , which reported that some artisanal mining operations reduced the number of workers at the mining sites, but in general there was little knowledge of the virus, and personal protective equipment was in short supply. Some mine owners feared that that if they stopped mining operations and went into self-isolation, they could lose their claims to other miners who may invade or take over during their absence.

But even if production is maintained, the challenge of selling the goods is considerable, the WDC report states. The government of Sierra Leone, for example, reported that official revenues from diamond mining fell to $330,000 in April 2020, from $2.24 million in April 2019. 

In its report released on April 30, 2020, ZELA and the Center for Natural Resource Governance (CNGR) expressed their concern that the pent-up economic pressure being experienced in the artisanal mining sector could lead to an increase in illegal acts when the volume of trade picks up in the market. There is a high risk that the opening of the mining sector will heighten money laundering, and illicit financial and mineral flows.