With the European Union’s G7 bloc decision to ban Russian diamonds, African gemstone producers could be major beneficiaries of the shifting sands in the global industry.
By Staff Reporter
The G7’s new diamond traceability regulations are shaking the industry, and African producer countries which produce 50% of the world’s diamonds, are well-positioned to take advantage of this shift.
The EU’s economic sanctions on Russia have resulted in a ban on importing Russian diamonds under the G7 Diamond Protocol, creating a huge opportunity for other producers to fill the gap.
The traceability program for imports of rough and polished natural diamonds will become mandatory on March 1, 2025, when importers into the EU are obligated to use a traceability-based certification scheme to verify imports of diamonds over 0.50 carats.
The G7 is an informal grouping of seven of the world’s advanced economies, including Canada, France, Germany, Italy, Japan, the United Kingdom and the United States. They have required that all diamonds entering G7 countries be sent through Antwerp, Belgium, to determine their origin.
Class Hallberg of the G7 Technical Working Group notes that African diamonds will gain an extra dimension and have the chance to replace Russian diamonds in G7 markets, which account for 70% of polished diamond consumption.
He stated that the G7 bloc believes it critical to ensure that non-Russian production is segregated to secure its route to market into the G7 countries which account for 70% of global consumer demand.
“African diamonds get an extra dimension and an opportunity to replace Russian diamonds in the G7 markets which take up 70% of polished diamonds,” he said.
However African producers led by Botswana, together with Angola, Namibia, and other African diamond producers, sent a letter protesting G7’s move, as an impediment to their interests.
The new system aims to provide transparency and accountability throughout the diamond supply chain. It utilizes blockchain technology to create an immutable record of each diamond’s history and origin.
Key Features of the G7 Traceability System
– Verification of diamond origin: Ensures Russian diamonds don’t enter the EU market
– Analogue registration: Initial stage, ending March 2025, before transitioning to full digitization
– Immutable numerical identification: Maintains a genuine record of each diamond’s journey
– Blockchain-based tracking: Enables real-time monitoring and verification
Brad Rooks Rubin of the G7 Technical Working Group believes the new measures will bolster the diamond industry during a challenging period. The industry is shifting towards transparency, driven by consumer concerns and demand for accountability.
“Our outreach and extensive consultation targets to bolster the diamond industry at a time when it is undergoing one of its most challenging periods with concerns over the future of the industry.
“This work is driven by taking up concerns from governments and producers in the market,” he said.
Companies like Tracr and Sarine are already working together to advance diamond traceability in G7 countries. Their solution combines blockchain and verification technologies to ensure seamless tracking throughout the supply chain.
The future of the diamond industry looks set for significant changes, with African producers poised to reap benefits from the shift away from Russian diamonds. As the G7 traceability system rolls out, transparency and accountability will become the new standards.