From Small Beginnings: The Mwadui Community Diamond Partnership

Tanzania might be best known for being the only source of the precious gemstone Tanzanite, but diamonds are also found in this east African country. It is also in Tanzania that De Beers, through their 75 percent-owned entity Williamson Diamonds Ltd. (WDL), the government, local communities and NGOs have started to investigate ways to alleviate poverty and accelerate sustainable socio-economic development among artisanal diamond diggers and the communities in which they live. The project that is developing methods by which this can be achieved is called the Mwadui Community Diamond Partnership (MCDP). The MCDP’s goal is to formalize, transform and support artisanal and small-scale mining communities in the Shinyanga region of Tanzania through a multi-stakeholder partnership. The objective is “to provide artisanal diamond diggers with access to fair-market pricing, technology, education and health and safety training, in the hope of creating a workable model that can be used to help informal alluvial diamond diggers in other diamond producing countries.”

The project was launched in August 2006 and was formally announced by the Director of De Beers, Jonathan Oppenheimer (who is also the chairman of WDL) and Tanzanian President Jakaya Kikwete at the annual meeting of the Clinton Global initiative in New York, in September of last year. At the meeting, Oppenheimer announced that De Beers would be investing $2 million in the partnership in cash and in kind through the provision of assets and expertise.

The partnership, says the company, is taking place in Tanzania because it is the only country where informal small-scale diamond mining and significant De Beers’ operations co-exist (De Beers operates in the country through a joint venture with the government – WDL).

Although De Beers does not have any business interests in informal mining, Oppenheimer said when he announced the initiative, “We cannot sit idly by and watch millions of African miners and their families suffer. While we may not have all the solutions or expertise, we hope to work in partnership with those that do to give this program the best chance of success.”

Based on the success of the Tanzania model, it is hoped that it will be possible to transfer the lessons and achievements of the MCDP to help improve the lives of informal miners in other diamond- producing countries, such as Sierra Leone, Angola and the Democratic Republic of the Congo.

“This is an example of the business-government partnerships we seek to build and sustain,” said President Kikwete. “Together, we can proclaim to Tanzanians that business is critical to the success of our development efforts.”

Nerys John, who is the De Beers project manager on the partnership said, “The fact that De Beers has a long-standing presence in Tanzania, coupled with the political and legislative stability of the country, and the keenness of the government to assist the artisanal sector, makes it an ideal location to start examining a new model of corporate social responsibility.”

At this point, the partnership is still in the planning stages. The key aim, says John, is “to empower and uplift digging communities in Shinyanga [the area where the mines are located] through the transformation and formalization of digging. Poverty alleviation remains at the core of the project.”

So far, she says, a diagnostic study has been carried out, which provided the MCDP with a socio-economic baseline of the digging communities as well as a clear idea of the size and workings of the artisanal sector in the region.

Looking to the future, says John, there is going to be a significant focus on training and development, health and safety, and the elimination of child labor.

Critically, she says, diggers need access to suitable land and to the full diamond value chain. “They have to be able to sell the diamonds they find at a fair market price, an option that is currently not available to them.”

What does she think is the future of the partnership? “Artisanal mining has become quite a hot topic,” she says, “within governments, the mining industry and the development sector. Although the issue has been thoroughly studied, so far there have been very few successful examples of addressing the challenges faced by artisanal miners.”

From De Beers’ perspective, there are a number of drivers pushing the development of the partnership forward. Firstly, she says, the project shows the company’s concrete commitment to the Diamond Development Initiative (see page 160), of which the company is a founding member. Secondly, De Beers hopes that in the future, exploration in the DRC and Angola will turn into fully fledged mining operations. “Therefore, this partnership can be developed into a practical model for operating in such areas as a new model of corporate social responsibility,” says John. “The MCDP also addresses many of the aims of the UN Global Compact, of which De Beers is a member, and the Millennium Development Goals. It is also very much aligned with the Tanzanian Government’s poverty reduction strategies.”

Artisanal Mining Facts

• Around 20,000 people are involved in artisanal and small scale mining in the Shinyanga region of Tanzania.

• According to information from the MCDP, almost all diggers work under a financier who expends only approximately $25 per digger per month to support their basic needs.

• In return for this financing, if a diamond is found, the digger must sell it to the financier and only receives approximately 8 to 16 percent of the stone’s true value.