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Côte d’Ivoire open for business again, as the UN Security Council Lifts Diamond Sanctions

07 july 2014

With an historical decision on April 29, 2013 the UN Security Council unanimously voted in favour of lifting the embargo on rough diamond export in Côte d’Ivoire. This decision was largely anticipated during the last Kimberley Process plenary in Johannesburg. In the final communiqué KP members recognised that Côte d'Ivoire has been finally fulfilling the KPCS minimum requirements, a condition the UN deemed necessary for re-evaluating the sanction regime.

Côte d’Ivoire has been a diamond producing country since the end of the Second World War, when French junior companies and international consortiums began industrial exploitation of two main concessions in Tortiya and Séguéla. At the peak of the industrial mining era, the country managed to export up to 300,000 carats per year. Industrial mining operations continued until the mid-70s, when deposits in both areas were deemed almost exhausted and uneconomical to run.

With mining companies retreating fr om the concessions, the extraction business in Côte d’Ivoire became primarily an artisanal business. Soon mining fields in both areas were filled with up to 30,000 artisanal miners, who gathered fr om across the country in search of a decent wage. Together with licensed workers, illegal diggers also reached the diamond fields, creating an illicit, and remunerative, parallel market. The government repeatedly tried to crack down illegal activities making use of military force, but with little success. In an attempt to regain full control of the diamond mining activities, the government-led Société d’Etat pour le Développement Minier de Côte d’Ivoire (SODEMI) invited foreign investors to engage again in mechanised and industrial mining activities, which would have been easier to regulate. From the late 1990s several companies engaged in exploratory activities in the area of Séguéla, and discussions started in the country about the possibility of opening a new industrial mine in the area.

But hopes of resuming industrial mining in Côte d’Ivoire soon came to an abrupt end, as the country slipped into chaos and civil war. In September 2002, a failed coup staged by the rebel group Forces Nouvelles (FN) led by Guillaume Soro resulted in a de facto division of the country in two separate entities. While President Laurent Gbagbo kept control of the southern half of the territory, the FN seized the north including the two diamond fields of Séguéla and Tortiya.

Once the Gbagbo government realised it had lost control over the diamond production areas, it immediately drafted a law forbidding the export of all Ivorian diamonds, and asked the newly created Kimberley Process to prohibit the trade of rough diamonds from the country. Despite these countermeasures the stones found their way out through neighbouring countries, wh ere they often received foreign certificates to be sold in the global market. Frustrated by the lack by cooperation by several states in the West Africa region, in 2005 the Kimberley Process made contact with the UN sanctions committee for Côte d’Ivoire to alert it about the risks posed by diamond smuggling in the region, and to solicit the implementation of a stricter embargo on mineral resources. The Security Council accepted the recommendations and in December 2005 passed Resolution 1643, placing an embargo on rough diamonds of Ivorian origin. This resolution made the embargo on rough diamonds from Côte d’Ivoire legally binding for all UN member states, thus strengthening the action of the Kimberly Process.

In the meanwhile the intervention of UN peacekeepers and the French army succeeded in bringing some temporary stability in the country. In 2007 President Gbagbo accepted a power-sharing agreement that saw Soro appointed as Prime Minister. The agreement, held for only three years. In the November 2010 presidential elections Alassane Ouattara was declared winner over the incumbent president. However, Gbagbo claimed electoral frauds and refused to step down from power. The dispute rapidly escalated into a conflict between the pro-Gbagbo south and the pro-Ouattara north, supported by the UN and France. After 6 months of protracted violence that killed more than 1,500 people and displaced a million of them, Ouattara’s forces took control of Abidjan and arrested Gbagbo. In November 2011 Gbagbo was extradited to The Hague, wh ere he will be tried by the International Criminal Court on charges of war crimes and crimes against humanity connected to the post-electoral crisis. With the country again unified, the government slowly regained control of the diamond fields, and paved the way for the recall of the UN embargo.

Now that the country is finally at peace after 15 years of conflict and instability, the new government is trying once again to attract foreign investors willing exploit the diamond concessions. But what do these concessions offer, exactly?

Due to the lack of recent exploratory activity in the mining fields of Tortiya and Séguéla, precise information on the quality and quantity of the diamond reserves is scarce. Yet, following the embargo regime imposed by the UN and the Kimberley Process illegal mining activities have been thoroughly scrutinised by the KP Working Group on Monitoring and some of its findings are now of public domain. The United States Geological Survey (USGS) in particular has conducted thorough investigations on rough diamond production in Côte d’Ivoire, the conclusions of which were made available on a recent report. By integrating older geological reports with high-resolution satellite imagery and terrain modelling algorithms, the USGS was able to estimate the total diamond reserves of the Séguéla and Tortiya deposits and the annual diamond production during the embargo years.

The town of Séguéla is located in the region of Worodougou, in the Northeast of the country. The bulk of the diamond fields is located just few kilometres northeast of the city. There are two major kimberlitic dikes in the area (the Bobi, and Toubabouko dikes), and several smaller ones. Artisanal miners close to Dirabana reportedly found a third major dike, but there is paucity of information around it. According to the USGS, past estimates of the quality of diamonds in Séguéla are ⅓ gem quality, ⅓ industrial and ⅓ boart. The stones are generally translucent white, sometimes yellow to brown, and, rarely, pale green. They are usually small, 0.3 kt on average, and with a maximum size of 4 kt. The average concentration grade is 0.3kt/m3. According to US estimates, over 13 million of the 23 million carats of diamond reserves in Séguéla have already been mined, leaving just above 10 million for future extraction.

Tortiya is a small town located in the Northern region of Bandama. The diamonds in the Tortiya deposits are considered of very high quality. The USGS compares them to those found in the Birim Valley in Ghana, but considers them bigger and with better clarity. The share of gem-quality stones is particularly high, at around 60%, and the average concentration grade is 0.25 kt/m3. Despite being of superior quality, diamond reserves in Tortiya are considered to be rather limited. According to USGS estimates almost 60% of the 2.6 million carats originally present in Tortiya have already been mined.

It appears that not all diamond reserves in Côte d’Ivoire may have already been discovered and thoroughly explored. Several diamond occurrences have been reported along the upper stream of the Nzi River, between the towns of Katiola, Ngolodougou and Dabakala. Those areas were subjected to exploratory research in the 1960s, but the source from which the river drains the diamonds was never found. For this reason, USGS geologists suggest that this area may be worth of further investigations.

The scenery painted by the USGS for Côte d’Ivoire is one that could be of interest primarily for junior mining companies interested in taking over reserves that have already been partially drained. Industrial activity in both Séguéla and Tortiya was suspended over 35 years ago, and technological developments may have made profitable those mines that once were deemed as anti-economical. Alternatively, there are possible investments in risky but potentially remunerative exploration activities, searching for exploitable diamond reserves in the Northern part of the country.

Matteo Butera, Rough&Polished