I need to know how this affects us here in the U.S?

-- The head of De Beers Group -- which controls 40 percent of the global diamond trade -- called on traders in Europe, the U.S. and Israel to back African efforts to cut and polish the continent's own gemstones.


A delivery of rough diamonds for cutting and polishing is inspected in Ramat Gan, Israel.

Managing Director Gareth Penny said it was logical to help create stability in African democracies through job creation.

"We don't embrace this out of some misguided enthusiasm or altruism, we embrace it because it makes good business sense and because it's the right thing to do," he said.

People will no longer buy 'conflict diamonds' nor will miners invest the billions of dollars needed to extract them, he said.

The illegal trade in "conflict diamonds" -- sometimes known as blood diamonds -- has fueled and funded wars in Africa, killing thousands in Angola, Sierra Leone, Liberia and the Democratic Republic of the Congo.

"We need a strong and stable set of producing companies if we have to maximize future supply. Producing and selling diamonds today in or from a country in chaos or worse, in conflict, is simply not an option," Penny said

Africa's natural resources have enriched traders across the world and Penny called on the gemstone industry in Antwerp, Tel Aviv and New York to fund and help train the infant industry, based mostly in South Africa and Botswana.

"Without the traditional cutting centers, these new cutting centers will not succeed," he said, promising that there are benefits for everyone.

Botswana mining ministry official Kago Moshashane said the country planned to create up to 3,000 jobs in the diamond processing industry.

Antwerp grew wealthy from Belgium's rule of the Congo and is now a center for diamond trading and finance. Antwerp has ceded its place to India's Mumbai, which now cuts most of the world's diamonds, many of them less costly small stones.

Antwerp World Diamond Centre's Chief Executive Freddy Hanard said Africa's drive to enter the market does not pose a threat to existing businesses.

"If that contributes to greater wealth in Africa, I think we should certainly contribute. Antwerp has a lot of expertise and ... we can help them," he said.

Nor should Africa's nascent industry pose a problem for Asia, Penny said, because African countries will have to find their own market niche. They will need "vibrant low-cost cutting centers in India and China to process the volume of low-value rough [diamonds] which is simply not economic to cut in Africa."

The De Beers chief was upbeat about Africa's future, saying the company was spending more than $100 million (71 million euros) every year to find new mines, "overwhelmingly in Africa and significantly in the Democratic Republic of Congo and in Angola." E-mail to a friend

how does it affect us in the US? supply and demand. ultimately affects the price you pay for a diamond.