Blood Diamonds (20 page)

In the words of Israeli diamond writer Chaim Even-Zohar, “The brave man would write that the whole issue of war diamonds can only benefit De Beers.”
¹³

 

DE BEERS'S OVERHAUL of its business plan included another massive change that effectively draws the curtain around the diamond giant's operations once and for all. The entire De Beers Group—which is composed of both the original De Beers Consolidated
Mines, Ltd. and De Beers Centenary AG, which operates all the company's mining interests outside South Africa—was purchased off the London and South African stock exchanges by insiders in 2001, rendering the company's operations invisible to the public. Events in Canada made such a move necessary.

In 1999, a diamond rush in Canada made history not only by locating a fresh field of superb gem-quality diamonds—a yield that will amount to 15 percent by value of the world market once fully on line—but by thwarting De Beers's attempts to corral the find. If any place in the world represented Sierra Leone's spectral opposite in terms of hellish mining environments, it's clearly the Barren Lands in the extreme northern reaches of Canada. In November, three-quarters of the day is darkness and temperatures average 30 degrees below zero without wind. And there's always wind.

This was the situation in 1991 when miners Chris Jennings and Gren Thomas boarded a Twin Otter airplane in one of Canada's hinterland cities, Yellowknife in the Northwest Territories, and flew 200 miles farther north, in a desperate race to stake claims before De Beers. When the men arrived in Yellowknife, they learned that De Beers was already there, chartering helicopters for a big push into the north.

In such an environment, locating diamonds is rather different from in places like Sierra Leone. Frozen tundra, nine months of nonstop snowfall, and glacial movements require astute geological surveys, not just blind luck. Therefore, in the early days the Barren Lands explorers were hunched over in the land of caribou and bears, digging holes and lugging around sacks of dirt and rocks, the only humans for hundreds of miles amid the eskers and frozen lakes. Their samples would be flown to laboratories and examined for kimberlite indicators, traces of minerals that can be expected to
be found in diamond-rich kimberlite. If you find red pyrope garnets, green chrome diopsides, or black ilmenites, you might be sniffing in the right place. From that point, it's just a matter of detective work, intuition, and good luck.

What made Canada such a threat to De Beers wasn't its harsh mining environment or the high quality of goods being discovered, but the fact that Canada is home to most of the diamond industry's pilot-fish—small, publicly traded exploration companies known in the business as the “juniors.” Usually comprising little more than a few close friends and exploration experts, the juniors had the ability to track down rumors and move quickly to stake claims. De Beers's mode of operation has usually been to allow these companies to find diamonds and then buy out their claims once the hard exploratory work has been done and the discovery has proven its worth.

And that might have been the scenario again if the major find hadn't been discovered by BHP Minerals, a subsidiary of Broken Hill Proprietary Company, an Australian mining company. BHP's North American headquarters was in San Francisco and the company owned several coalfields in the U.S. Southwest, a fact that scuttled any possibility of a De Beers partnership: The conglomerate's antitrust troubles in the United States would likely jeopardize any arrangement. The fact that BHP already had a solid presence in the United States was equally worrisome. The belief was that arctic diamonds would flow almost exclusively south, into the maw of the world's hungriest diamond consumer, America. Therefore, one of the most valuable diamond discoveries of the twentieth century seemed likely to be out of reach of the company that had made diamonds what they are in the first place.

De Beers was facing similar challenges on other fronts. Once his work in Canada was finished, Chris Jennings boldly began
looking for diamonds on De Beers's doorstep, in Kimberley—and he found them.

Not 200 miles from the conglomerate's stomping ground in Kimberley, Jennings used old cartographical information, gumshoe footwork, and modern exploration methods to discover a 25-mile-long kimberlite fissure and a micropipe on a farm called Marsfrontien. Although De Beers eventually was awarded the claim in court, after the heirs to the farm sold it the mineral rights, Jennings wasn't finished pounding on the giant. He moved to Angola, where his company won the right to explore one of the largest diamond-producing kimberlites in the world, in Camafuca. Under the deal, Jennings's company paid the MPFL mineral and exploration fees and shared the profits with the government.
¹⁴

This trio of blows, all delivered within a few short years in the 1990s, knocked De Beers off balance. In 1999, it took the advice of its financial consultant and agreed to quit its role as “market custodian” of the global diamond market, selling a quarter of its London stockpile. The timing couldn't have been better; in 2000, economic prosperity in the United States was at an all-time high. The company ended the year selling a record $5.7 billion worth of diamonds. Profits exceeded $1.2 billion.
¹⁵

The new business strategy for the company was retail selling. It's such an obvious move that it's a wonder it hadn't been pursued earlier. The De Beers name is synonymous with diamonds, luxury, romance, and commitment. Every other retailer in the world will now have to compete with “A Diamond Is Forever,” one of the most recognized advertising slogans in the history of marketing. As these companies attempt to stir up demand for their product, they will fill that demand—where else?—from De Beers, the only diamond retailer in the world that will also sell millions of carats of
rough a year to its competitors. It's estimated that retail sales could account for $500 million a year to De Beers.
¹⁶

On June 8, 2001, De Beers officially disappeared from the radar. All publicly owned shares of the company and its subsidiaries were purchased by a consortium of buyers collectively called DB Investments. The buyers were the Oppenheimer family, which has controlled the company since the 1920s; Anglo-American Corporation of South Africa, De Beers's sister corporation that focuses on gold exploration; and Debswana, the diamond exploration company owned jointly by De Beers and the government of Botswana.

The absorption of the company from the South African and London stock exchanges into private hands means that De Beers no longer has to make detailed public financial reports to securities organizations or shareholders. According to the script drafted by Cecil Rhodes more than 100 years ago, De Beers is officially accountable to no one.

 

 

 

 

W
E FOUND RUF MAJOR Gabril Kallon hungover from a night of indulgent marijuana and gin intake; there was apparently little else to do in Makeni, the RUF's northern stronghold, except get blinded on drugs and wait to see what would happen with the UNAMSIL peace agreement. Even in his exhausted state, Kallon was a fierce person. In his mid-twenties, he had the eyes of an experienced killer, a look I'd seen almost everywhere in Sierra Leone, a look that said life can be taken without a second thought. He was an important cog in the RUF diamond machinery, a man whose brutality inspired enough terror in his countrymen that they would abandon any place the RUF wanted for itself.

I was sitting on the front porch of Kallon's compound, a pink concrete house that, according to the sign still standing in the front yard, was once the Makeni headquarters for Concern, an aid organization that had fled the city like most other groups. Makeni was the RUF's political and military base in the summer of 2001 and most peacekeepers were unwelcome there. I'd hitched a ride with three employees of the UN's World Food Program to meet some RUF leaders, an endeavor that, until I ran into Kallon, proved almost utterly fruitless. I'd had a five-minute conversation with Eldrid Collins, one of the RUF's military leaders turned political bosses, but he wasn't happy that I'd arrived unannounced in the middle of a strategy meeting. I told him the name of my guest house in Freetown and he promised that his men would look me up in a few days for a formal interview, something that never happened.

So I wandered the pulverized town of Makeni with Aya Schneerson, one of WFP's directors, as she scouted the market for aid food being resold on the black market. Hundreds of RUF supporters and refugees were jammed into the market, a four- or five-block maze of kiosks, rough timber food stands, upturned buckets, and gaunt faces, all centered around a dump truck that reeked of fish. Shirtless men stood on top with shovels, yelling down into the crowd, selling the skinny fish by the spadeful. Movement was practically impossible without resorting to shoving and jostling and the cacophony was deafening: hundreds of people yelling, screaming, mumbling, laughing, and crying, a sardine tin of humanity that emanated body heat like sun-baked asphalt.

We made our way to a quiet corner of the teeming market and bought Cokes, wondering about our next move. We hadn't found any illegally sold aid food and we hadn't found any RUF leaders
who had time to talk with us. Just as we were contemplating leaving for Freetown, a tall black woman in an ankle-length dress recognized Aya. She was one of Kallon's wives and she offered to take us to him.

“Is it far?” Aya asked.

“No, no,” the woman answered. “Small-small walk.”

Based on that description, we decided to leave the WFP Land Cruiser and walk, none of us thinking that a “small-small” walk might be different for us than for someone used to walking everywhere. We were soon out of the city center and meandering down one of the access roads, the street lined with widely spaced houses that had been destroyed during the recent years of fighting. Most were now occupied by RUF fighters who'd claimed one for themselves. Several sat on their porches, polishing rifles and looking with suspicion on two white-skinned people trying to act calm during a stroll through RUF territory, heading deeper and deeper into the jungle. We were nervously discussing the intelligence of leaving the truck behind when we came upon a UNAMSIL checkpoint manned by Nigerians, one of the few times in my life when the sight of a peacekeeper only made me more uneasy.

“The Nigerians won't lift a finger for us if something happens,” Aya said, reading my thoughts.

But we glided through the checkpoint and after another hour of walking, when we were ready to give up and go back, our guide pointed to the former Concern building. “There,” she said.

The compound looked like an African version of a fraternity house. The porch was clogged with armed fighters lounging with a tense boredom and gangs of chickens fought in the courtyard. Two black pickup trucks were parked in the dirt, tricked out in suburban ghetto-style, festooned with antennas, decorated with peeling
and sun-faded stickers depicting Bob Marley, marijuana leaves, and geometric designs. We were regarded warily by Kallon's squad and were eventually invited to sit with them.

Aya was the center of attention. White people tend to draw stares in the African outback, but attractive white women with long blonde hair are rare enough that their presence can stop the economy, if there were one. I was pointed to a chair on the corner of the porch and ignored as she did most of the talking.

Kallon emerged from the gloom of the house, shirtless and wearing tight-fitting black jeans. Even though he was only a midrank ing officer, he was the commander of Lunsar District, centered on the town of the same name about 55 miles west of Makeni. We'd been through Lunsar earlier in the day. The site of ferocious battles the year before, the town was deserted except for RUF patrols. Almost all the buildings in Lunsar are flattened and the jungle has moved in like a hungry scavenger plundering a corpse. We hadn't stayed long there; Lunsar's distance from Makeni made it a tense and boring outpost and those we encountered seemed to be weighing the opportunity to terrorize unexpected visitors. One young RUF soldier who reeked of ganja followed me throughout the town, staring nonstop from behind thick wraparound sunglasses, saying nothing, but obviously waiting for me to fall behind like a wounded fawn being tracked by an inexperienced hyena.

My relative anonymity on the Concern porch was shattered when I introduced myself to Kallon.

“Greg
Campbell
?” came a booming voice from the other end of the porch. A huge RUF soldier leaned toward me with sudden interest. “From Colorado?”

What? How could he know that? I thought quickly back to everything I'd done in Sierra Leone up to that point that could have
caused my reputation to precede me, way out
here,
in the middle of the jungle, to a commandeered headquarters deep in RUF territory. I could think of nothing.