On Wednesday, Sotheby’s attempted to auction off the largest diamond discovered in over 100 years. The tennis ball-sized rock was recovered in November from an open-pit mine in Botswana.
The diamond, at 1,109 carats, is second in size only to the “Cullinan” diamond discovered in 1905. The citizens of Botswana are calling the new diamond “Lesedi La Rona,” which translates to “Our Light.”
The diamond was valued at $70 million before the start of the auction, but after bidding failed to reach a reserve price, the mining company, Lucara Diamond Corp., announced that it would just hold onto the diamond for the time being.
Lucara is a Canadian company and a relatively small player in the industry. Yet, the same week it uncovered the Lesedi La Rona, it also found two other gigantic diamonds, including the world’s sixth largest diamond that was sold for a record-breaking $63 million during an auction in May.
While Lucara is undoubtedly making a huge profit, many people are wondering how these sales will benefit the country of Botswana.
Many parts of Africa have already suffered because of atrocious diamond industry practices. It is common knowledge that the diamond industry has been rampant with worker exploitation, government corruption, and environmental destruction in addition to severe mismanagement of revenues that have torn countries apart.
Diamond mining only recently became a lucrative venture in Botswana. In fact, it wasn’t until 1967 that diamond deposits were discovered in the region. For the longest time, no one believed that there were any natural resources available in Botswana. As a result, the government focused its efforts in developing other industries on which the economy could rely.
Fast-forward to 2016 — Botswana is now one of the biggest suppliers of rough diamonds in the world. Global diamond jewelry sales continue to increase, currently reaching more than $72 billion annually.
Unlike arrangements made in other African countries, Botswana shares joint-ownership of some of the most important mines. This setup guarantees that it receives the majority of the profits, and Botswana’s progressive taxation system requires mining companies to pay higher tax rates when they get windfalls.
This all sounds well and good for the country of Botswana, but is it sustainable? Some are concerned of what will happen when the diamond supply is depleted. With few other resources, continual economic stability may prove to be a challenge.