DPA Report Seeks Total Clarity about Impacts of Diamond Mining

Mining and Exploration
02/05/2019 18:05

The Diamond Producers Association (DPA), a global alliance of the leading diamond mining companies, which represents 75% of the world’s diamond production, today released its first independent research report on Members' impact on local communities, employees and the environment. The report, authored by Trucost and titled The Socioeconomic and Environmental Impact of Large-Scale Diamond Mining, is the world’s first comprehensive analysis of the contributions of DPA Members, examining socioeconomic and environmental benefits and impacts.

Data from Trucost ESG Analysis, part of S&P Global, reveals that DPA Members generate more than US$16 billion in net socioeconomic and environmental benefits through their diamond mining operations. The report finds that the vast majority of these benefits are infused into communities through local employment, sourcing of goods and services, taxes and royalties, social programs and infrastructure investment. The report also uncovers that DPA Members pay employees and contractors on average 66% above national average salaries and that companies focus extensively on employee training to ensure a highly-skilled workforce. The report from Trucost also creates a baseline from which DPA Members will further build to demonstrate progress toward their emission reduction goals. Collectively, Members emitted the equivalent of 160 kg of carbon dioxide per polished carat produced.

The latter finding upends a current environmental debate in determining that mined diamonds are less carbon-intensive than man-made, but it does say their producers should use more green energy. The U.S. Federal Trade Commission, which investigates allegations of deceptive advertising, recently sent warning letters to eight lab-grown diamond companies after noting an unfounded use of 'eco-friendly', or similar terms, to describe diamonds made in a laboratory, a process that requires very high temperatures. Mined diamonds also have a high environmental impact, displacing thousands of tonnes of rock, although the analysis carried out by Trucost, part of S&P Global, for the Diamond Producers Association (DPA) found the carbon intensity of natural diamonds was lower. 

“This report marks an industry first. Diamond producing companies representing three-quarters of the world’s production have come together to provide a window into the impacts and benefits of their activities on the communities and environments of the countries and regions in which they operate,” said Jean-Marc Lieberherr, Diamond Producers Association CEO. “This independent research report breaks outdated stereotypes and misconceptions and identifies the next set of challenges that must be met to continue to evolve and improve as an industry. It also provides a baseline for industry participants and observers to track future progress.” 

"This report marks the first time Trucost has seen an industry come together to measure its environmental, social and economic benefits and impacts," said Libby Bernick, Managing Director and Global Head of Trucost Corporate Business. "This data provides a baseline for future progress on issues, including environmental impact." Trucost measured the total benefits and impacts of the diamond mining activities of the DPA Members across 21 key socioeconomic and environmental indicators based on data collected for over 150 different metrics from DPA sites representing 70% of the DPA Member’s total rough diamond production. These data were verified by Trucost and then analyzed using Trucost’s proprietary natural and social capital quantification and valuation methodologies, which have been employed in more than 100 studies over the past 15 years.