Ebola casts a shadow over the West African diamond industry

The Ebola virus results in a decreasing export of rough diamond in West-Africa. Since the outbreak of the killing epidemic, diamond merchants and investors ignore the region more and more, for fear of infection. Lots of diamantaires from Asia and Europe have sent their shipments back immediately. 

West-Africa global player at the diamond market

Traditionally, West-Africa is a popular region for international diamond merchants and diamantaires. Countries like Ivory Coast, Sierra Leone, Ghana, Guinea, Congo, Nigeria, Liberia and Senegal produce on yearly basis more than 1, 19 billion euros rough diamond.    

The whole African continent produces on yearly basis more than 11 billion euros diamonds, which covers around half of the global production. This evolution has changed in the last months, but people expect the diamond trade will recover once the danger for contagion has passed.

Also for diamond giant De Beers, who is active in Botswana, Namibia and South-Africa, Ebola is a serious threat for their local activities. According to them, a further spread of the disease can harm the position of the African diamond industry in its whole.  

Are there consequences for the European market?

Each month, 16 million euros of rough diamond is imported from West-African countries. Since the outbreak of the Ebola virus, the export of diamond has almost stopped. When Ebola keeps spreading to other countries, there might be a risk of a shortage of diamonds, at least for a few months, at the international market.   

Diamond companies in the whole world will encounter this influence, because there will be less work for their diamond cutters. The governments in South-Africa, Botswana, Namibia, Zimbabwe and Angola have already taken measures to stop the disease by tightening their border controls. 

Author: Tim Claes
Source: BAUNAT

With this article, BAUNAT strives to inform you thoroughly about investing in diamonds. No investment can be guaranteed to be without risk or fully according to your expectations. That is why we recommend to research the risks and aspects of investing in diamond properly to ensure that you make the right choice for your portfolio.

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