Identifier
Created
Classification
Origin
09CONAKRY499
2009-08-26 12:55:00
SECRET
Embassy Conakry
Cable title:
GUINEA'S DIAMOND CIRCUS
how-toVZCZCXRO1588 RR RUEHPA DE RUEHRY #0499/01 2381255 ZNY SSSSS ZZH R 261255Z AUG 09 FM AMEMBASSY CONAKRY TO RUEHC/SECSTATE WASHDC 3960 INFO RUEHZK/ECOWAS COLLECTIVE RUEHMO/AMEMBASSY MOSCOW 0043 RUCPDOC/DEPT OF COMMERCE WASHDC RUEAIIA/CIA WASHDC RHEFDIA/DIA WASHINGTON DC RHMFISS/HQ USAFRICOM STUTTGART GE
S E C R E T SECTION 01 OF 02 CONAKRY 000499
SIPDIS
SENSITIVE
E.O. 12958: DECL: 03/16/2019
TAGS: EMIN ECON ETRD PGOV PREL GV
SUBJECT: GUINEA'S DIAMOND CIRCUS
REF: CONAKRY 00478 CONAKRY 00490
Classified By: ECONOFF BRIANA WARNER FOR REASONS 1.4 (B) AND (D)
S E C R E T SECTION 01 OF 02 CONAKRY 000499
SIPDIS
SENSITIVE
E.O. 12958: DECL: 03/16/2019
TAGS: EMIN ECON ETRD PGOV PREL GV
SUBJECT: GUINEA'S DIAMOND CIRCUS
REF: CONAKRY 00478 CONAKRY 00490
Classified By: ECONOFF BRIANA WARNER FOR REASONS 1.4 (B) AND (D)
1. (S) Summary: EconOff attended a Kimberly Process (KP)
diamond certification at the Central Bank on August 18 and
met with a well-known Guinean diamond assessor on Aug 21.
Both meetings shed light on the unregulated nature of
Guinea,s diamond industry as well as the level of
inexperience evident throughout Guinea's diamond production
and certification process. One meeting also raised the
possibility that the largest diamond mine in Guinea may have
links to Russia,s illicit diamond trade. The CNDD does not
seem interested in, or capable of, regulating the diamond
trade. Technocrats in the Ministry of Mines who seem capable
of fixing the system may be being pushed out by the military
junta. END SUMMARY.
--------------
THE CERTIFICATION MESS
--------------
2. (C) On August 18, EconOff attended a routine diamond
valuation and certification by the National Bureau of
Expertise in Diamonds and Precious Metals (BNE). The BNE is
the division of the Ministry of Mines that oversees the
diamond valuation and the KP certification process. Three
representatives from Mandala diamonds, a Guinean subsidiary
of Stellar Diamonds Ltd., were in attendance to accompany
their industrial, semi-industrial, and gem quality diamonds
through the valuation process.
3. (C) The Head of the BNE, Madam Salle, was enthusiastic
about showing EconOff the valuation process. After asking
Mandala about their production, Salle and her team sat down
to evaluate the price of the diamonds. During the evaluation,
one representative from Mandala, who did not give his name,
asked EconOff about American investment in the diamond
industry. He went on to inquire about possible investment
from Embassy personnel. He asked Econoff if anyone at the
Embassy would be interested in coming to his office "to
invest and make some money." When EconOff explained to him
that her interest with the certification process was for KP
compliance assessment only, the man quickly moved away and
ceased commenting.
4. (C) The two other representatives of Mandala were much
more forthcoming. They discussed the massive price
devaluations within the diamond sector and told EconOff that
valuation is currently floating around 50% lower than August
2008. They complained that many of the diamond mines in
Guinea are struggling to survive at the moment, as they are
virtually unable to sell their industrial diamond stocks.
5. (C) As is required by the certification process, a
representative from Customs came to verify the certification
and sign the certificate. Upon arrival, he barely glanced at
the diamonds on the table before vouching for their
authenticity and volume. Salle then proceeded to ask the
customs official to support geological training for the
certifying officials, as those who do it now "have no
training and no idea what they are looking at."
6. (C) Salle was eager to show EconOff the pile of
high-quality gems on the table to prove that these types of
diamonds do, in fact, come from Guinea. When asked how she
determined the origins of these gems, Salle had no logical
explanation. She simply stated that Mandala brought the
diamonds from their mine in Guinea, and she takes them at
face value. It seemed because she was told by the company
that the diamonds were from a Guinean mine, Salle accepted
their origin as such.
--------------
UNCONTROLLED MINING AND LINKS WITH RUSSIA
--------------
7. (C) EconOff met with Lamine Thiam, Mandala,s diamond
assessor on August 21. A well-known diamond technician,
Lamine was AREDOR,s main diamond assessor for nearly 15
years. According to Lamine, there is no real regulation
mechanism for the diamond industry in Guinea. Lamine noted
that there are only a few diamond mines operated by diamond
CONAKRY 00000499 002 OF 002
experts. The others, he said, "are operated by a bunch of
older Muslim Hajjies" and are almost totally unregulated. "In
this industry, if you don,t live and work with a person, you
can never be sure what their activities are."
8. (S) Lamine was very eager to share information about Bouna
Keita, AREDOR,s new proprietor (reftel A). According to
Lamine, Bouna is not serious about developing his new mine.
Furthermore, Lamine said that Keita, in his partnership with
Victor Kubiak, is rumored to be working with elements in
Russian diamond-smuggling rings. He told EconOff that Keita
has traveled to Antwerp several time to meet with Russian
dealers who have engaged in shady diamond dealing in the past.
9. (C) On internal government affairs, Lamine said that his
cousin, Minister of Mines Mahmoud Thiam, is slowly being
edged out of his position. An American citizen and former UBS
Vice President in New York, Thiam is considered by many as a
skilled technocrat. However, Lamine said that Thiam is
constantly at odds with the CNDD, as he sees Guinea,s
economy crumbling under their poor economic management.
Allegedly, Thiam feels undercut by his military colleagues
and does not have much influence in decision making at the
Ministry of Mines.
--------------
COMMENT
--------------
10. (C) It appears that little is known about the scale of
diamond mining operations in Guinea as regulatory practices
are more about processing paperwork than about enforcing
rules. Guinea,s large diamond reserves, combined with
political and economic instability, create opportunities for
illicit activity and easy access to cash for criminal
organizations. Bouna,s supposed connection to Russian
criminal elements suggest that such illicit activity is
already taking place.
11. (C) Lamine,s assessment of the shifting power structure
within the Ministry of Mines may further exacerbate the
effects of poor regulation. There are rumors that Thiam has
been losing footing within the CNDD since March (reftel B),
and Dadis, creation of the Secretariat of State in Charge of
Mines and Energy on August 20, may only weaken his hold on
mining affairs.
BROKENSHIRE
SIPDIS
SENSITIVE
E.O. 12958: DECL: 03/16/2019
TAGS: EMIN ECON ETRD PGOV PREL GV
SUBJECT: GUINEA'S DIAMOND CIRCUS
REF: CONAKRY 00478 CONAKRY 00490
Classified By: ECONOFF BRIANA WARNER FOR REASONS 1.4 (B) AND (D)
1. (S) Summary: EconOff attended a Kimberly Process (KP)
diamond certification at the Central Bank on August 18 and
met with a well-known Guinean diamond assessor on Aug 21.
Both meetings shed light on the unregulated nature of
Guinea,s diamond industry as well as the level of
inexperience evident throughout Guinea's diamond production
and certification process. One meeting also raised the
possibility that the largest diamond mine in Guinea may have
links to Russia,s illicit diamond trade. The CNDD does not
seem interested in, or capable of, regulating the diamond
trade. Technocrats in the Ministry of Mines who seem capable
of fixing the system may be being pushed out by the military
junta. END SUMMARY.
--------------
THE CERTIFICATION MESS
--------------
2. (C) On August 18, EconOff attended a routine diamond
valuation and certification by the National Bureau of
Expertise in Diamonds and Precious Metals (BNE). The BNE is
the division of the Ministry of Mines that oversees the
diamond valuation and the KP certification process. Three
representatives from Mandala diamonds, a Guinean subsidiary
of Stellar Diamonds Ltd., were in attendance to accompany
their industrial, semi-industrial, and gem quality diamonds
through the valuation process.
3. (C) The Head of the BNE, Madam Salle, was enthusiastic
about showing EconOff the valuation process. After asking
Mandala about their production, Salle and her team sat down
to evaluate the price of the diamonds. During the evaluation,
one representative from Mandala, who did not give his name,
asked EconOff about American investment in the diamond
industry. He went on to inquire about possible investment
from Embassy personnel. He asked Econoff if anyone at the
Embassy would be interested in coming to his office "to
invest and make some money." When EconOff explained to him
that her interest with the certification process was for KP
compliance assessment only, the man quickly moved away and
ceased commenting.
4. (C) The two other representatives of Mandala were much
more forthcoming. They discussed the massive price
devaluations within the diamond sector and told EconOff that
valuation is currently floating around 50% lower than August
2008. They complained that many of the diamond mines in
Guinea are struggling to survive at the moment, as they are
virtually unable to sell their industrial diamond stocks.
5. (C) As is required by the certification process, a
representative from Customs came to verify the certification
and sign the certificate. Upon arrival, he barely glanced at
the diamonds on the table before vouching for their
authenticity and volume. Salle then proceeded to ask the
customs official to support geological training for the
certifying officials, as those who do it now "have no
training and no idea what they are looking at."
6. (C) Salle was eager to show EconOff the pile of
high-quality gems on the table to prove that these types of
diamonds do, in fact, come from Guinea. When asked how she
determined the origins of these gems, Salle had no logical
explanation. She simply stated that Mandala brought the
diamonds from their mine in Guinea, and she takes them at
face value. It seemed because she was told by the company
that the diamonds were from a Guinean mine, Salle accepted
their origin as such.
--------------
UNCONTROLLED MINING AND LINKS WITH RUSSIA
--------------
7. (C) EconOff met with Lamine Thiam, Mandala,s diamond
assessor on August 21. A well-known diamond technician,
Lamine was AREDOR,s main diamond assessor for nearly 15
years. According to Lamine, there is no real regulation
mechanism for the diamond industry in Guinea. Lamine noted
that there are only a few diamond mines operated by diamond
CONAKRY 00000499 002 OF 002
experts. The others, he said, "are operated by a bunch of
older Muslim Hajjies" and are almost totally unregulated. "In
this industry, if you don,t live and work with a person, you
can never be sure what their activities are."
8. (S) Lamine was very eager to share information about Bouna
Keita, AREDOR,s new proprietor (reftel A). According to
Lamine, Bouna is not serious about developing his new mine.
Furthermore, Lamine said that Keita, in his partnership with
Victor Kubiak, is rumored to be working with elements in
Russian diamond-smuggling rings. He told EconOff that Keita
has traveled to Antwerp several time to meet with Russian
dealers who have engaged in shady diamond dealing in the past.
9. (C) On internal government affairs, Lamine said that his
cousin, Minister of Mines Mahmoud Thiam, is slowly being
edged out of his position. An American citizen and former UBS
Vice President in New York, Thiam is considered by many as a
skilled technocrat. However, Lamine said that Thiam is
constantly at odds with the CNDD, as he sees Guinea,s
economy crumbling under their poor economic management.
Allegedly, Thiam feels undercut by his military colleagues
and does not have much influence in decision making at the
Ministry of Mines.
--------------
COMMENT
--------------
10. (C) It appears that little is known about the scale of
diamond mining operations in Guinea as regulatory practices
are more about processing paperwork than about enforcing
rules. Guinea,s large diamond reserves, combined with
political and economic instability, create opportunities for
illicit activity and easy access to cash for criminal
organizations. Bouna,s supposed connection to Russian
criminal elements suggest that such illicit activity is
already taking place.
11. (C) Lamine,s assessment of the shifting power structure
within the Ministry of Mines may further exacerbate the
effects of poor regulation. There are rumors that Thiam has
been losing footing within the CNDD since March (reftel B),
and Dadis, creation of the Secretariat of State in Charge of
Mines and Energy on August 20, may only weaken his hold on
mining affairs.
BROKENSHIRE