India's Blood Diamonds and Dirty Gold

How many of you wear gold?

I personally am dripping with gold. Right now, I'm wearing a pair of small gold hoop earrings, two gold bangles, a gold nose ring, and a gold necklace.

Apparently, gold is an "Indian passion." Back in 2005, the Christian Science Monitor reported that "India's costly love affair with gold" was "weighing down" the economy. And really, indian-bride.jpglook around you: aunties, mothers, grandmothers, and sisters wear some object of gold. Prior to a shaadi, what is the bride-to-be presented with? Gold jewelry. What is the bride wearing lots of? Gold jewelry. When someone gives you a gift, it's gold jewelry. In every Desi enclave in the diaspora, there is at least one jewelry stores that sells a lot of- you guessed it- gold:

India is the world's #1 consumer of gold, accounting for almost a fifth of gold sales. Wedding season in India, which runs from November to February, is when gold jewelry sales are at their highest, accounting for 60 to 70 percent of the country's annual gold consumption [Link].

Where does this come from? Why do we wear lots of gold?

Wearing gold not only enhances strong emotional feelings for its wearer but also completes a woman's appearance - it makes women feel indulgent, beautiful, successful, confident and sexy. Women who wear gold jewellery consider it to be an integral part of their appearance, and consider it as a necessary item rather than just an accessory. There are also traditional reasons for wearing gold, such as for marriage, religion, and family gifting [Link].

Ok, this sounds more like constructing gender ("women are sexy and feminine") and infusing it with consumption ("and wearing gold will make a woman feel even sexier") in order to market gold. It's analogous to how people say, "Diamonds are a woman's best friend." So you are man who is about to propose to your girlfriend; you go out and spend thousands or millions of dollars to get her a diamond ring because that is what "women like," and presumably expect. And speaking of diamonds, demand for gold has declined while the sales of diamonds have seen a spike.

Whatever the sources are for this consumption of gold and diamonds, few people know where the diamonds come from and what are the effects of wearing gold.

From 1991 to 2002, there was a civil war in Sierra Leone that took place alongside Liberia's 14 year long civil war as well. Both civil wars were partially funded by "blood diamonds;" that is, diamonds from these two countries which were used finance the civil war. This spawned a whole industry of middlemen, smugglers, and so on, especially after the UN imposed sanctions.One of the stops that smugglers made was in India. In 2000, the BBC reported:

India is one of the world's largest centres for processing and polishing diamonds. The industry employs nearly one million people and generates more than $6.5bn in foreign exchange.

A team of UN experts is in the Indian capital Delhi and says there are indications that some Indian diamond dealers may be involved in smuggling "blood diamonds".

...[R]eports say there are fears that blood diamonds are entering the Indian market indirectly, from trading centres in Antwerp, London and Israel [Link].

Back then, the UN team didn't have the "resources to to check on the involvement of suspected Indian criminals in trading diamonds coming from Sierra Leone." But now, there is evidence that blood diamonds are showing up in Surat, Gujarat, the epicenter where 92% of the world's diamonds are polished:

India's diamond industry is the fastest growing in the world, employing more than a million people and turning over some $8bn a year. But an investigation by The Observer has uncovered a damning consequence - evidence of the sale of blood diamonds on the black market from the Ivory Coast and Liberia, both banned from trading by the UN.

Such is its standing in the international diamond industry, India is expected to be chosen by the United Nations to take over the Kimberley Process - an initiative to stop the trade in African blood diamonds - from the EU.

In a thriving corner of Surat's bazaar, Samir Shah's fat Rolex and impressive girth provide testament to his flourishing business. 'These stones are from Africa,' he said, holding up two knuckle-sized murky brown diamonds. 'We can't always tell where they are from, but they aren't legitimate. But here business is done with cash and no questions.'

Amnesty International agrees that the industry is funding bloody conflicts in Africa. 'The sparkle of diamonds still comes at a heavy price,' a spokeswoman said. 'The Kimberley Process is being systematically bypassed and the reality is that conflict diamonds from Liberia are being smuggled into neighbouring countries for export and stones from strife-torn Ivory Coast are also finding their way to the Middle East and to India for processing and ultimately into European markets.'

Blood diamonds are not the only issue threatening the Indian government's credibility. Campaigners say it continues to ignore Dickensian working conditions and the use of child labour. India's Save the Childhood Foundation estimates that diamond workshops employ up to 30,000 children.

Surat is an abysmal scene of row upon row of decrepit factories and redbrick chimneys spewing yellow toxins into a discoloured sky. Every morning more than 500,000 diamond cutters, most earning less than $2 a day, trudge into its factories to slice, polish and facet the rough stones into sparkling gems.

This, economists say, is the true genius of India. It takes in the 'garbage' from mines in Australia, Canada and Africa, slaps 58 facets on it, sets it in gold and sells it on at a vast profit [Link].

Two months ago, the UN lifted a six year ban on Liberia exporting diamonds; but the government has still not legalized diamond mining. My guess is that keeping the diamond mining industry illegal will only help the underground/black market flourish even more, in which smugglers and middlemen play a large role. That means Surat will be the hub of much of this activity, as it may very well be right now.

Then there's the "dirty" gold, which refers to irresponsible mining practices:

The gold industry consumes a tenth of the world's energy, spews about 30-50% of the globe's toxic emissions and imperils 40% of the frontier forests. A single gold ring generates a staggering 20 tons of waste.

Estimates vary, but it is believed that at least 13,000 tonnes of gold rest in India – or approximately 9% of the world’s cumulative mine production.

India is the biggest consumer of this metal, some 950 tonnes of it annually, by some counts (accurate estimates are impossible to come by, considering that much of it is smuggled in, though not on the scale previously). Old-timers still recall “the bad old days” when Morarji Desai, as finance minister, imposed a Gold Control Order. Everyone had to declare his holdings, much to the chagrin of some householders, especially industrialists and sundry businessmen who hoard gold as unaccounted-for wealth.

“The hoarding tendency is well ingrained in Indian society, not least because inheritance laws in the middle of the 20 th century lent a great desirability to anonymity. Indian people are renowned for saving for the future and the financial savings ratio is strong, with a ratio of financial assets-to-GDP of 93%. Gold is valued in India as a savings and investment vehicle and is the second preferred investment behind bank deposits. India is the world’s largest consumer of gold in jewellery (much of which is purchased as investment). Gold circulates within the system and roughly 30% of gold jewellery fabrication is from recycled pieces. India is typically also the largest purchaser of coins and bars for investment (over 80 tonnes per year).” [Link]

What are the consequences of this, you might ask. Apart from the environmental consequences, there's the human costs: massive human rights violations such as in the Democratic Republic of Congo, as well as villagers in Buyat Bay, Indonesia, who have suffered health problems from the gold mining waste that has been dumped in the bay.

Something to think about when you put on your best gold jewelry set and those sparkling diamonds.

* Photo found here.

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Comments

While it is necessary that

While it is necessary that this gold craze subsides,if not disappear, The arms trade is the real culprit to keep many a war going. One should try to help in all possible ways to stop that trade.

Desi Italiana, I know you

Desi Italiana,

I know you mean well, but you are naive.

The real culprits are the arms sellers, and the policy makers and the world community that allows such civil wars.

Why isit necessary for India to adjust its culture, just because some other people are violent, ignorant, or just plain evil.

Once again hypcocracy of the

Once again hypcocracy of the Western Press:

1. Israel is the largest processor of larger diamonds. No mention of that.

2. India consumes only 20% gold. Then the rest of the world consumes 80%. Why no mention of the majority gold consumers as aiding the war.

India getting beat up again by the biased Western media.

Lets stand up for India.

It's in a[n Indian] person's

It's in a[n Indian] person's soul to rock that gold... -Kanye West (changed, obviously)

I don't have a problem with

I don't have a problem with women wearing gold ornaments, but its irritating to watch Indian men wear gold chains, rings and other jewelry. Its hot as hell in India, we are hairy and add jewelry to that, its insane!

I have a cousin who's getting

I have a cousin who's getting married recently, and she's been talking jewellery non stop for a year now. We're Bangladeshi, so we probably don't measure up to the gold consumers in Dada-land next door, but even so, gold is inseparable from daily life.

These days though, there are more adverts for diamond jewellery than gold on TV and magazines, especially the Indian ones. Nakshatra, Asmi, Tanishq... wedding collections or for daily wear... beautiful women dripping stones, gorgeously photographed or filmed. Enough to make even the most conscientious woman lust after a little stone to sparkle for her forever.

I couldn't help wondering where all these diamonds were coming from all of a sudden (rough estimate - over the last 6-7 years). Blood diamonds are quite a likely source, although I can't confirm that. The big brands will have my guts for daring to dirty their names with such a thing, but if there wasn't a sudden influx of these stones, would diamond jewellery become such a popular item? Can it be similar in practice to how we make make twelve different pickles and preserves when mango season hits town? So many stones - what to do - must discover new ways of selling them. So the high worldwide gold prices don't hurt business either.

Editing note: I have added

Editing note:

I have added the bit about the DR of Congo, Indonesia, and the UN lifting a six year ban on Liberian diamond exporting.

BDeshini: These days though,

BDeshini:

These days though, there are more adverts for diamond jewellery than gold on TV and magazines, especially the Indian ones

That's interesting...I'm sure that there's a reason for that, meaning it is a conscious effort to market "Indian gold." It must be some bilateral trade agreement or something that allows India to flood Bangladesh's upper class market with expensive designer jewelry.

I'll check that out :) (Or someone else can see if they can come up with this info).

I couldn’t help wondering where all these diamonds were coming from all of a sudden (rough estimate - over the last 6-7 years).

Africa. Africa accounts for 60% of the world's diamonds.

Can it be similar in practice to how we make make twelve different pickles and preserves when mango season hits town? So many stones - what to do - must discover new ways of selling them.

I'm guessing it's a question of status symbol. Partly because these stones are rare, partly because of the way they are marketed, and partly because of their high prices indicates that the wearer of these stones are well off.

I know several NRI's who went to Rajasthan and came back with boxes of beautiful jewelry sets with gorgeous stones embedded in them. I remember asking how much they paid for it, but now I can't remember what the prices were.

The Gulf is also becoming the latest central hub for buying cheap gold; furthermore, it's the largest consumer of diamonds:

"With no sales tax, Dubai is one of the cheapest places in the world to buy jewellery and gold...Similarly, millions of expatriates from the Philippines, Sri Lanka, Pakistan, Bangladesh and India, find Dubai an ideal and cost-effective place to buy gold, especially in the form of jewellery,"

"The Middle East is one of the most critical markets for diamond jewellery. The Gulf is one of the largest consumer markets for DTC, besides the US, Japan, China, Italy and India. The diamond jewellery market in the Gulf has increased by almost half in the past four years," says Chippindale [Link].

***

Here's a 2004 overview report of the Indian gold market As a side note, it says that prices for gold peaked during the Iraq invasion in 2003, followed by an increase in the gold supply in the Middle East.

Fascinating article. Does

Fascinating article.

Does anyone have any advice about how one might determine if a particular jewelry store in India is selling 'blood diamonds' or 'dirty gold?' It's difficult, of course, since so much happens under the table, but there has to be some way....

And Dilip, it's undoubtedly true that other countries besides India are responsible for this mess. But, the majority of the people reading this board are likely Indian and are also likely going to come in contact with its jewelry business. Thus, let us make a difference where we can do it-- amongst our families in our culture. If Israel is also to blame, then let's not buy gems from them, same for the rest of the middle East and most of the West. But we should do what we can where we can do it.

I don't believe that

I don't believe that jewellery is a bad thing. I do however believe that it is wrong to buy diamonds that are acquired the "blood" way. I have stopped buying any kind of diamonds.

Gold is pure, and much more lovely than a clear stone anyhow. Rubys and other precious stones acquired in India I think are fine too.

Namaste, Amreekan Desi: The

Namaste, Amreekan Desi:

The one thing that caught my eye was the point about the gold industry consuming 10% of the world’s energy.
Isn’t that a bit too much for a single industry involving a rare metal? I mean..10% ??

When I was researching this tidbit, I didn't come across any other numbers to set against this figure of 10%.

But the 10% doesn't surprise me. Precisely because it's a rare metal, it's not like mining in the old days, which was looking for nuggets of gold that the 49'ers in SF did in the mid 1800's. As I understand the mining process, now, you blow up massive rocks and/or mountains to get to the ore deposit. You then use cyanide to leach out the gold. Where the mountains once stood, you have large pits/craters. Cyanide in small amounts can be toxic (not to mention the metals and chemicals released when you blow up these mountains and rocks- some of these metals aren't toxic if they are left locked within the rock, but once the rock is exploded, you've released these metals into the air). Then you have to find a way to get rid of the "tailings," ie waste, which is often a toxic cocktail. There are various methods to do this (above ground, dump in lakes which is supposedly illegal in the US), one of which is ocean dumping (whose effects we do not know yet).

Also, let's not think that just because something is rare, it can't produce toxic emissions. Oil is rare, and look at the havoc it wreaks.

Here's the general process of open pit mining:

http://www.responsiblegold.org/gold_production.asp

and Wiki has a suprisingly good explanation (with pics):

http://en.wikipedia.org/wiki/Open-pit_mining

http://en.wikipedia.org/wiki/Gold_mining

If there's a geologist/miner/scientist reading this, feel free to correct my explanation (I ain't no scientist, so scientific critiques are welcome).

BTW, is the links tag not working for anyone else? Or do the IE and Firefox versions I have need upgrading?

yeah, good catch,

yeah, good catch, amreekandesi. that seems quite high, and a little digging didn't produce any results. It seems to come from here earthworks or oxfam, but i'm not sure. Write to the author of the piece.

The one thing that caught my

The one thing that caught my eye was the point about the gold industry consuming 10% of the world's energy.
Isn't that a bit too much for a single industry involving a rare metal? I mean..10% ??

Gold is pure, and much more

Gold is pure, and much more lovely than a clear stone anyhow. Rubys and other precious stones acquired in India I think are fine too.

Yeah, yeah yeah.

"Purity" is an ideological construct. It's exactly this kind of thinking that drives the consumption and the market of gold, making us believe that there is something symbolically special and unique about gold.

I'm sure that if you were from Buyat Bay, you'd take issue with the so-called "purity" of gold:

http://www.motherjones.com/news/feature/2007/09/rick-ness-mr-clean.html

By wearing a nose stud, I

By wearing a nose stud, I have got confidence in my married life and also I had a good expirience during sex with my hubby. So, wearing a nose ring is also good for our sexual l

By wearing a nose stud, I

By wearing a nose stud, I have got confidence in my married life and also I had a good expirience during sex with my hubby. So, wearing a nose ring is also good for our sexual

I've got to ask, how is nose ring good for your "sexual", as you say?

Dear Lord, now these crazy

Dear Lord, now these crazy spammers are striking here. When will the madness end?

Dear Lord, now these crazy

Dear Lord, now these crazy spammers are striking here. When will the madness end?

When the spam filter starts working better :)

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