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The legend about "diamond embargo"

30 december 2013

"During World War Two Britain supplied industrial diamonds worth £1,424,000 to the Soviet Union as military aid. With an estimated price of one pound paid for 2 carats, the amount of delivered diamonds could approximately reach 2,800,000 carats, or 620,000 carats per year, representing about 5% of industrial diamonds consumed by the United States during the war. But with the beginning of the Cold War this assistance stopped. And to buy the same amount of diamonds at high prices and for hard currency was too expensive for the USSR, as in the prewar years. At the same time, there was the fear that the deteriorating political situation was likely to bring about strict regulations for diamond supplies aimed at all-round pressure on the Soviet Union and its new East European allies. Indeed, in 1950 the United States imposed an embargo on the supply of industrial diamonds to the USSR and to all countries of socialist orientation."

This is a quote from the article titled "Expanding the search for diamonds in the USSR in the post-war years (1946-1950)" by Rishat Yuzmuhametov, a well known Russian historian of the diamond market. The article published in the journal of “Historical and Socio-Educational Thought” in 2013 is piping hot and appears to be a typical example of "endurance" of an industry legend. The legend, which was so successful that today, after more than 50 years since it was made up, it continues to sway the minds of historians, journalists and functionaries of the diamond industry, sincerely convinced that the landmark discovery of diamond deposits in Yakutia was primarily due to the unsatisfied need for industrial diamonds of the Soviet military industrial complex.

That such views are very far from reality is proven by a dramatic event related to the qualitative modernization of the Soviet military industrial complex in the late 1940s - early 1950s. In March 1946, Churchill delivered his famous Fulton speech, which is considered the starting point of the Cold War. Six months later, Britain was visited by a delegation of Soviet designers and engineers who received samples of the most recent Derwent and Nene jet engines from Rolls-Royce and the appropriate know-how for their production. Already in 1947 the Soviet Union started mass production of Nene I and Nene II engines indexed as RD-45 and RD-45F, while the Derwent V engines were manufactured as RD-500. Soviet plants Nos. 16, 19, 24, 26, 45, 478, 500 turned out more than 50 thousand of these engines (including VC-1, a modernized version of Nene) in 1948-1954. Those engines were used to equip serial fighter aircraft MiG-15, MiG-17, Il-28 bombers, Tu-14 torpedo bombers and KS cruise missiles, as well as numerous experimental planes produced by experimental design offices of Yakovlev, Tupolev, Ilyushin and Sukhoi. Through the collaboration with Rolls-Royce, the USSR became the owner of the world’s largest (!) fleet of fighter jets not inferior to the best foreign models. And this revolutionary technological spurt cost the “country of workers and peasants” virtually nothing – the invoice for £207 million charged by Rolls-Royce was never paid.

One of the most significant technological secrets passed to the USSR by the British was the Nimonic 80A nickel alloy, and exceptionally hard and heat-resistant substance used to manufacture turbine blades for aircraft engines. The parts made out this alloy were processed by special diamond tools, which at that time the Soviet Union did not produce. To mass produce domestic versions of the Rolls-Royce engines and their modifications the country inevitably required a sharp growth in the supply of diamond tools. And such supplies were increased (proportionally to the production of engines) several thousand times from 1947 to 1953. Only inveterate wise crackers could call such deliveries a "diamond embargo."

And such wise crackers popped up. In the 1960s - 1970s, the English-language media ran a number of publications claiming that the Soviet Union was subjected to "diamond embargo" and therefore imported industrial diamonds by way of smuggling. These publications depicted "old merchants from Beirut," KGB and GRU agents and other equally romantic characters. However, those articles and books did not cite even a single document to prove this diamond smuggling. Still, they turned into a reference base, which was concertedly used by Soviet and later on by modern Russian authors writing about the notorious "embargo" with perseverance worthy of a better cause. But the actual deliveries of diamond tools for the production of advanced weapons were modestly bypassed by the mass media (in the supplying countries) or were hidden under the confidential label (in the USSR). Analysis of reasons for such a warm cooperation between the USSR and "imperialist powers" destroying the hackneyed propaganda templates is beyond the scope of this article, but the fact that the legend of the “diamond embargo” was created as one of the elements of information disguise for this process is beyond doubt.

The final point in the problem of "diamond embargo" is put by the secret "Memo..." from Foreign Trade Minister Mikhail Menshikov to Joseph Stalin dated July 31, 1951. In this document Menshikov reports that the United States adopted the so-called “Kem amendment” limiting U.S. aid to countries "exporting arms, ammunition or strategic materials that can be used to make weapons to the USSR and countries of people's democracy, including China and North Korea, as well as items that are prohibited in the United States for export to these countries." Menshikov then voiced fears that as a result of the Kem amendment the USSR may experience difficulties in importing strategic goods, including industrial diamonds.

Note the date of the “Memo...". It’s July 1951. The Cold War long passed into the hot phase involving dogfights in the skies of Korea in November 1950. Soviet MiG-15s (with Rolls-Royce engines) were fighting with American aircraft F-80, F-84 and F-86. There were hundreds of planes shot down. Soviet aircraft factories were running at full steam churning out thousands of engines and consuming the appropriate diamond tools imported from abroad, while Menshikov was only expressing fears... Is it what you’d call "embargo"?

It is quite obvious that at least until the summer of 1951 any restrictions in shipments of diamond tools for the Soviet military industrial complex were out of the question. But when Menshikov wrote his "Memo..." to Stalin, large alluvial diamond fields were already discovered in Yakutia. Therefore, attempts to explain the intensification of prospecting for diamonds in Yakutia by a mythical "diamond embargo" cannot withstand criticism. The main motive and the main purpose for the exploration and development of diamond deposits both in the Urals and in Yakutia was diamond exports to De Beers to obtain hard currency. Industrial diamonds recovered in the Urals were never used by the Soviet industry, while those mined in Yakutia were used only after 1958, when the Soviet Union launched its first factory for the production of diamond tools.

Sergey Goryainov, Rough&Polished