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International Business, 8th Edition by Michael H. Moffett, Iikka A. Ronkainen, Michael Czinkota

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PART 5 CASE 4

WHEN DIAMONDS WEEP

The ancient Greeks called diamonds the tears of the gods. Today, we know that natural diamonds consist of highly compressed carbon molecules. They have become a symbol of beauty, power, wealth, and love. Nevertheless, diamonds and the diamond trade are plagued by a sad reality: the exploitation of populations for diamond extraction and the use of diamond profits to fund terrorist activity and rebel groups.

Trade in diamonds is highly profitable. They are readily convertible to cash, small and easily transportable, not detectable by dogs, nor do they set off metal detectors. Unfortunately, these virtues also make them an easy target for money laundering activities by terrorist and rebel groups. In addition, their high value encourages some diamond-producing countries to employ means of extraction which may violate human rights. Consider the case in Botswana where a rich diamond deposit was discovered on the land belonging to a tribal group, the Bushmen. The government forcibly resettled the 2,500 Bushmen.

THE DIAMOND PRODUCTION PROCESS: FROM MINE TO MARKET

Diamonds are mined in several different ways: from open pits, underground, in alluvial mines (mines located in ancient creek beds where diamonds were deposited by streams), and coastal and marine mines. Despite advances in technology, diamond excavation remains a labor intensive process in most areas of the world. Over 156 million carats of diamonds are mined annually (one carat is the equivalent ...

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