Diamonds - Whose Best Friend are They?

Last fall you might remember a story about an extremely large diamond - the size of a tennis ball, being found in southern Africa. Turns out it came from a mine in Botswana run by the Canadian mining company Lucara. It was quickly shipped from Botswana to Canada where dealers expected it to sell for something like 60 million dollars.

Botswana produces more diamonds by value than any other country in the world - 3.63 billion dollars in 2013. It's one of the reasons that Botswana is among the wealthiest countries in Africa.

Lucky for the people of Botswana, no one knew they had any diamonds before they gained their independence in 1965. Had the British known what riches lay beneath the dry soil, they just might have found reason to hang around a bit longer.

We hear a lot about Blood Diamonds, and you might even have seen a Leonardo DiCaprio film on the subject. Botswana has no blood diamonds. Four foreign diamond companies mine the shiny rocks, and the trade appears to be above board for the most part. Diamonds are the country's biggest source of wealth right now, but they are thinking it's time to diversify - the mines might last another decade, two at the most. Tourism seems to be the most likely candidate to replace the gem trade as the cornerstone of the economy.

While government policy has intended to spread the diamond wealth around, a recent World Bank report describes Botswana as the country with the third highest rate of income inequality in the world. (Bernie Sanders take heed.)