Finance Ministry accuses West of creating cartel mechanism in diamond market

The West is trying to create a cartel mechanism in the diamond market within the framework of the Kimberley Process, Deputy Finance Minister Moiseyev said. Restrictions on competition could lead to a collapse in prices and the replacement of diamonds with synthetic stones

For the first time in history, the Kimberley Process member countries failed to agree on a final communiqué at a plenary session, as the G7 and EU countries tried to include restrictions on diamond supplies from RUSSIA in the package of decisions. However, participants outside the Western bloc did not support these initiatives. Deputy Finance Minister Alexey Moiseyev told journalists about this.

According to him, the G7 and the EU are trying to create a cartel structure parallel to the Kimberley Process (KP). "We are currently seeing a goal set to create a sustainable sanctions mechanism, a conditional KP-2 cartel, to close the markets for consumption of jewelry and diamond products for politically undesirable countries and companies," he said. This is about the initiative of Western countries to introduce a direct ban on the import of Russian rough diamonds to the markets of these countries. Technically, this could be formalized through the introduction of a diamond certification mechanism only through the AWDC or GIA diamond centers located in Belgium and the United States , the deputy minister said.

According to him, the artificial restriction on diamond supplies from Russia cannot be compensated for from other sources. This may initially cause a short-term rush demand for diamonds from the remaining producers, which will be followed by a sharp decline in supply and a collapse in the cost of diamonds against the background of the replacement of natural stones with more affordable synthetics. This will clearly provoke a policy of price competition insurvival and, as a result, the frankly vulnerable position of all participants in the natural stone market, warned Moiseyev. "Responsible participants in the industry from mining to cutting and manufacturing jewelry in a very short time risk losing their business , and diamond-mining countries in Africa - a vital industry for the socio-economic development of entire regions, ensuring the well-being of local communities in the mining regions," said the deputy minister.

Among the issues in the final communiqué that was not adopted were also "substantive," Moiseyev noted. Among them were the launch of the permanent Kimberley Process Secretariat in Botswana, discussion of practical steps to implement the "Declaration on Supporting the Principles of Responsible Diamond Supply Chains as Best Practices," lifting the embargo on diamond exports from the Central African Republic, and electing Belarus as vice-chair of the process for 2024. "By the end of the year, we will try to find a way to approve the decisions approved by the KP participants by consensus during the plenary meeting in Zimbabwe," Moiseyev assured.

The Kimberley Process is a permanent intergovernmental conference aimed at eliminating “blood diamonds” — those that are mined illegally and finance terrorism and anti-government armed conflicts — from international trade channels. In 2023, Zimbabwe was the chair of the conference, and in 2024, the UAE will take over. The Kimberley Process meeting was held from 6 to 11 November.

On the eve of the meeting, in his letter to the Kimberley Process participants, Moiseyev warned that sanctions against diamond supplies from Russia would lead to a disruption of competition in the global market and could hit vulnerable groups in countries with diamond industries.

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