According to Prime Minister Alexander de Croo, Belgium wants to force Russian diamonds out of the Western markets. Belgium intends to become the West’s main partner in efforts to reduce Russia’s revenue from diamond sales.
Russian diamonds continue to legitimately enter the international market despite the sanctions imposed for the total military invasion of Ukraine. Russian diamond giant Alrosa’s prognosis for 2022 showed that the corporation was still optimistic about the mining industry’s prospects as it announced a $2 billion investment in the restoration of its important Mir mine.
Alrosa has previously received sanctions from the US and the UK. Russian non-industrial diamond shipments have been outlawed by the US. Additionally, the US has outlawed loan and stock deals with Alrosa and its CEO Sergey Ivanov.
Alrosa, despite earlier rumors that the corporation would be specifically targeted, was not a part of the eighth package of EU sanctions. According to reports, Belgium, which is home to the biggest diamond center in the world and provided 40% of Alrosa’s revenue in 2021, blocked the sanctions.
The Financial Times said that Belgium initially opposed including any diamonds in the planned 11th package of penalties on Russia because of concern that doing so would undermine its status as the main international hub for diamond trafficking. However, Belgium eventually modified its position.
Russian diamonds were being pushed to be labeled as “blood diamonds” by the EU and Canada. According to reports, the Kimberley Process summit in Botswana in June 2022 was where the topic of Russian diamonds was brought up. However, due to vetoes by Russia, China, and Belarus, it was not able to be banned. Kyrgyzstan, Mali, and the Central African Republic (where Russian mercenaries purportedly work in diamond mines) were also Moscow’s allies.
Most significantly, market participants in India told the Financial Times that eliminating Russian diamonds from commerce would jeopardize hundreds of thousands of jobs in the diamond trading and polishing sector, which depends on Russian jewels 60% of the time.
The US government estimates that more than $4.5 billion of Russian exports were made up of diamonds in 2021. Since diamonds are among Russia’s top ten non-energy exports, the sanction will have an impact on the country’s economic performance.