Diamond Mining in Sierra Leone and in Botswana - Essay Example

Diamond Mining in Sierra Leone and in Botswana, the Economic Impact Diamonds, treasured by all, have been the good and the bad of economic independence in Africa. This is especially true when we review that of Botswana and Sierra Leone. Two different kinds of mining are most active in each of these countries. Two totally different ways of managing the resource have been present. There has been not only economic but political struggle and continued struggle over the manner in which the land is being used. We will attempt, in this paper, to discuss the differences in management of the resource by the two governments as well as the depth of the type of mining involved. Botswana gained it's independence in 1966. It previously had been the British protectorate of Bechuanaland. It has moved to being one of the richest and most stable African countries on the continent. It is often called the Switzerland of Africa (afdiamonds, 2009). This economy is fueled by diamond mining. Botswana came from being one of the poorest countries in Africa to this. There are still hopes for this country and there are many issues to solve for their poor but they have accomplished much. Botswana is classified as an upper middle class country and the World Bank classifies it as the most affluent country in Africa. The World Bank, (2002) states that it has the fastest growing economy in the world. This growth rate has had to do with their diamond industry and how it has been managed. It must also be noted here that Botswana has been one of the favorites for aide donation over this time of growth. The physical and social infrastructures of this country are highly developed because of the government's ability to increase the ability of its country to use the national resources of diamonds and also manage with aide from other countries as it developed these resources (Wikan, 2004). Diamonds were discovered in Botswana in 1967 after a full search that lasted 12 years. They presently run 4 large diamond mines. Juaning is in Southern Kalahari, Damsha and Lethlahana in the central Kalahari are the largest. These mines exports maintain 80% of export earnings for the country and 45% of their GOP. These mines are jointly owned by DeBeers and Botswana. The government of Botswana has a history of managing this resource well. From early on, mineral rights were vested in the State. The government then would use this on the discovering of good deposits to assure that they had equity interest in the site. They then collected royalties from the other minerals involved such as gold. They designed the 1999 Mines and Minerals Act to allow for foreign investment to occur. This also diversified interests so that the diamond mining was not the only interest of the company to support their economy. The government has kept their ability to apply interests to new discoveries. The political atmosphere and leadership in Botswana has been one of formulating economic reason for the country. When DeBeers became greatly involved in these countries mining processes and the amount of diamonds produced, the government of Botswana remained in the negotiations of all processes and procedures. Politically there were astute throughout the process with excellent leadership and little political conflict. It has to be noted, also, that major mines were situated in area where prior to that there was little or no work available These diamonds lie under Botswana in the Rocks of Kaapaal. There are more kimberlites here than any other place in the world. There are rich deposits of gold, platinum, based metals and minerals in those same places. They have produced more diamonds since 1867 than any other part of the world. The Orapa mine alone is expected to produce at the present rate of production for at least the next 40 years. The expectation is that there will be an operating margin of $130 per ton using the pit mining technique that they presently use. The climate conditions and the available electric power there improve the situation that much more. The country of Botswana is engaged in pit diamond mining. In this method large pits are developed that bring the level down to the kimberlite structures where the diamonds are harvested. In many cases this can be difficult to do and there are reports of children being used to harvest the final dirt within the kimberlite structures to send up for screening for diamonds. This can be a very harsh climate for a child in heat and risky circumstances. However, often times, the child in this country may be the breadwinner for the family as a whole. Yet with all of this, the eradication of poverty in Botswana has not occurred. This middle class country has much poverty still. The reports from the country report that there is a large reduction in the poor yet severe poverty continues in the country sides. The poorest of all are the female head of households who are usually undereducated, elderly or live in remote areas (Wilkan, 2004). The greatest concern is that as the country becomes more wealthy, the wealth is not spread well (called the spread effect). The number of household that actually live under the poverty level is actually growing. Botswana has become not only the fastest growing economy, but the country with the fastest growing income inequality (Wilkan, 2004). Still, though this is a country in transition, diamond mining has been well used in the pursuit of a better economically supported country. In the case of Sierra Leone, it has been determined whether diamond mining has been a blessing or a curse. "Natural resources are morally neutral. They can be a source of greed-and all this implies-or a source of good. The choice, as it has always been, is ours. (Oppenheimer, 2008). Sierra Leone has had a rocky trip to the best use of their diamonds for their economic security and certainly this struggle continues. The diamond has led to generations of greed and hatred in Sierra Leone. The horrors of the civil war and the wanton loss of life have occurred over the last quarter of a century over diamonds and its mismanagement in Sierra Leone. The term Blood Diamonds came from here. Most of these problems stemmed from the illicit sale of diamonds fueled by the countries governmental structure. Sierra Leone saw independence in 1961. It is and has been the home of more than one culture. Its independence was followed by Civil War in 1991-2000 (Ndumbe, 1992). This struggle developed over the want and need to control the diamond export in the country. In 1960, Sierra Leone had one of the best educated public sectors in the country of Africa. Its workers were well trained in a professional way and they had regulations to begin to set up a newly independent country. The 1970's however began to show financial mismanagement as political problems occurred and more involvement with the army occurred. This resulted in gross mismanagement as well as inefficiency and favoritism in the countries resources. Ethnic tensions became greater than before and there were major challenges from sectors such as the APC (Ndumbe, 1992). Prime Minister Margai had died in 1964 and Stevens assended to power. Prime Minister Stevens quickly turned diamond mining into a political problem. He allowed a trusted friend, Jamil Mohammed, a Lebanese businessman to manage the business end of the diamond industry. There was a misuse and sale of shares immediately after this took place. Stevens was then succeeded by Joseph Momah who continued with Stevens policies and continued to trust in Jamil Mohammed. The legal exports of diamonds began to drop and went from 2 million carats in 1970 to 595,000 carats in 1980 and then down to 48,000 in 1988 (Ndumbe, 1992). This drop was twofold. There was mismanagement of the industry in general and there was illegal trade in diamonds occurring. With all o this occurring, it is obvious that wealth from resources was distributed to party loyalists instead of the nation. This further decayed social, economic, and political stability. To add to this the countries that were providing aide to Sierra Leone requested that there be a new political infrastructure and the stress combined with all that was already happening completely brought the economy of the country to its knees. All of this led to rebel activities. Most diamond mining in Sierra Leone is done through the alluvial method. Alluvial diamond mining is limited, usually; to small scale arisanal operations which take place in diamond bearing rocks and gravel that are usually located in the drainage basins of the Bafi, Mano, Moa, Sewa, and Woe Rivers. This is a fairly primitive way to mine. It is non-mechanized and involves hand digging mud, sand, or gravel from the river bank. That is then sifted using hand held sleves. This type of mining accounts for about 90% of West Africa's diamond exports and is the largest source of employment in Sierra Leone. Everyday, many men and women leave for the mud flats. These are men, women, children, and the elderly. They claim a very small wage in hopes of finding diamonds and sharing in that find. The method of open pit mining is beginning to take some effect in Sierra Leone as there are many kimberlite pipes here too. However, the mismanagement of the resources in this country have put them far behind in this process and the process of exploration is still in effect. They must then find the right joint ventures and partner with the right companies which may be difficult considering the history that they are up against. They are, however, exporting a larger and larger number of legally mined diamonds and there s hope for the future. The Kimberly Process has helped. The Kimberly Process is a process that was adopted by the United Nations in 2002. The goal was to prevent illicit diamonds from entering the legitimate market place. The Kimberly Process certification scheme was born from that. In the Certification Scheme, tamper-proof containers, forgery proof documentation and package tracking was use. This led to the demise of the illegal diamond trade, clearing the way for a better was for Sierra Leone. This brought hope for the future for Sierra Leone. It has allowed reconstruction of the political system, allowing for better management of resources (Grant, 2005). Suddenly, amid the poverty, you can now begin to see new houses, shops and small buildings that are being newly built or in some cases renovated (Grant, 2005). During the incompetent periods of management of Stevens and Momah, aide from other countries continued to grow. Now, only recently that aide is decreasing as Sierra Leone begins to get a handle on the management of their resources which of course, includes diamonds. Not only diamond resources have improved. With the wealth being created from the diamonds there is improvement in other resources. The tax revenues from the diamonds have begun to produce commodities that allow for other trade of goods and services. Agriculture has improved as an important resource which leads to better food and overall improvement in health. The two countries of Sierra Leone and Botswana have two different histories when it comes to the management of the resource which they both claim, that recourse being diamonds. In Botswana which is a rich country, they have managed their resource well since their independence and are now at the brink of trying to figure out how to spread that wealth throughout their country in a better way. They are presently much richer in the cities than in the country. Is that not true in most countries though In Sierra Leone, there has been a long history of mismanagement that has only recently ended and that history has led to a long history of a poor, war ridden country. The hope of that country is recently renewed however, as they now begin to build their infrastructure and better use their resources. In conclusion, diamonds are forever. Diamonds are meant to be a symbol of love. The worldwide trade of diamonds is tremendous, both in its numbers and its income. There are lives at stake for many reasons during that process and many of those are lost during the finding and mining of the diamonds themselves. Every country has a history of management of its resources. In the case of these two countries that history is completely different though they are on the same continent. There is an extreme history of mismanagement, crime, war, and death in one and the history of independence leading to management and richness in the other. Still in both, there continues to be poverty than has great need of being addressed. Still there is greed in both countries that is fueled by the greed in others. Still there is hope for the future as diamond mining continues to be a major resource and each finds its way to better management and financial security. Resources http://www.nationencyclopedia.com/Africa/Botswana-Mining.html http://www.afdiamonds.com/wad/view/wad/en/page499 htttp://www.worldbank.com. Ndumbe, A. (1999). Diamonds, ethnicity, and power: The case of Sierra Leone. Retrieved from ebscohost.com November 14, 2009. Oppenheimer, N. (2008). Diamonds, Development, and Democracy. World Policy Journal. Fall. Retrieved from ebscohost.com November 10, 2009. Wilkan, G. (2004). The level of living in rural Botswana re-studied. Northwegian Journal of Geography. Retrieved from ebscohost.com November 14, 2009. Wright, C. *2004). Tackling conflict diamonds: the Kimberley process certification Scheme. Retrieved from ebscohost.com November 9, 2009. Read More