Beny Steinmetz and African Mineral Wealth: Diamonds are Not an African's Best Friend

At the beginning of the film ‘Blood Diamond’, a concerned boardroom executive states: ‘these stones are being used to purchase arms and finance civil war’, thus setting the scene for the movie. That much is true. By employing the passive voice in such a sentence, however, the film fails to point the finger at anyone in particular; yet it could easily be aimed at Beny Steinmetz.

Steinmetz is the head of BSG Resources, and has ownership and stakes in many other companies, such as Koidu Holdings, Magma Diamond Resources and Energem, (whose CEO is the British mercenary Tony Buckingham) which were involved in the bloody diamond fields of Sierra Leone’s long civil war. More recently, Steinmetz’s Koidu Holdings was accused of shoddy business practices, including the destruction of the environment near the mine: residents complained that dynamite blasts caused frequent clouds of dust and showers of rocks to fall frequently, and that water sources had been contaminated. Workers also stated that they were paid as little as two dollars per day to go down into hazardous mines with nothing but a hardhat to protect them from falling boulders and thick dust, and if they complained or took days off, they were beaten or sacked. When the community peacefully gathered to protest Koidu’s practices, authorities were given orders, allegedly by the company, to shoot. Two local residents died, and eight were badly injured. Despite a five month investigation, Steinmetz escaped unscathed.

Sierra Leone is not the only African nation where Steinmetz has caused grief.
In the Democratic Republic of Congo (DRC), he was recently accused of financing the uprising against Mobutu, which resulted in three million deaths and the installation of a new President, Laurent Desire Kabila. When the war was finally over, Kabila’s first priority was to break up and privatise Gecamines, a large mining interest that contributed the lion’s share of the country’s export income. Steinmetz’s close relationship to the Kabila family is thought to have facilitated the takeover of copper and cobalt mining in the Congo by Nikanor, a company owned chiefly by his business partner, Dan Gertler. The Steinmetz/Gertler partnerships also control Dan Gertler Industries, Steinmetz Global Resources, and Global Enterprises Corporate (GEC), which have diamond concessions in Kasai, and copper/cobalt concessions in Katanga, both of which are provinces in the DRC.
Supporting the coup in the DRC was strategically important for Steinmetz, as the Israeli-American diamond cartels involved in Congo are seeking to displace the diamond interests in Angola run by Steinmetz’s arch-rivals, Lev Leviev and Maurice Tempelsman, key players in of the Angolan state diamond companies.
Belgian-born Maurice Tempelsman also has a long and bloody history in Africa. When Congo’s first Premier, Patrice Lumumba, pledged to return diamond wealth back to the newly independent Congo in the early 60’s, Tempelsman was involved in the coup that installed the dictatorship of Colonel Mobutu, as well as the overthrowing of Ghana’s Kwame Nkrumah. Blood diamonds played a large role in each case, and these two military takeovers set the stage for the role of conflict diamonds in Africa from that point on. Yet financing coups d’etats is just one way Steinmetz and his ilk manage to obtain concessions for themselves and their associates. They also form close relationships with dictators and their families to win favours.

To illustrate, in Guinea, mining giant Rio Tinto risked large investment in drilling programs, which resulted in discovery of significant iron ore deposits in Simandou, south east of the country. The company followed Guinea’s long legal channels to obtain a mining concession over the ore, and then laid down infrastructure and groundwork to exploit the resource. A sly opportunist, Steinmetz then used his connections in the Guinean government to leech on to Rio’s explorations and gain half of its legally allocated iron rich territory. Although the corporate press reported that Steinmetz ‘won’ this concession (presumably via some kind of tendering process), given that the Guinean government suddenly cancelled Rio’s northern Simandou concession and granted it to Steinmetz the same day, this is highly unlikely; the rumour has it that that large sums of money passed hands to make the deal happen.

Whilst it may be difficult to conjure up much sympathy for Rio Tinto here, the implications of Steinmetz’s power over the government should be worrying for Guineans: because most large multinationals are under much scrutiny from NGOs and shareholders they must follow international transparency practices, and tend to pursue sounder economic and environmental sustainability policies. Steinmetz’s companies, however, seem to get away with a lot. This may be because he has a powerful Public Relations team working for him, and, especially in Israel, reporters are often sent to Africa to be ‘embedded’ with the Israeli companies they are writing about. Steinmetz has also very powerful interests backing his dealings: he is said to be close to many powerful figures in both the Israeli and American governments.

The latest news in Guinea is that the new military government that took over after President Conte died is reconsidering any contracts that were awarded under shady conditions. While some may believe that the influence of the new government may not work to Steinmetz’s favour, the more likely scenario is that Steinmetz will influence the government yet again to make it do so. No matter what it takes.

Sense of Humour:
Steinmetz seems to be in touch with his feminine side. At private parties, he has offered his guests special massages formulated to open their chakras by employing the healing benefits of (blood?) diamonds placed on key points of the body. Never one to waste any part of the diamond mining process, he has also created the world’s most expensive skin cream, which promises to rejuvenate and refresh skin through the miraculous use of—you guessed it—diamond dust! He also has the cheek to list ‘donations to army units’ as one of the ‘worthy causes’ of his charitable foundation.
Chery Morris (a lecturer at SOAS, the University of London )

Africa/Diamonds: Rough diamonds, in Africa Confidential, 5 March 2004, Vol. 45, No. 5; and "Equatorial Guinea: All Theft is Property," Africa Confidential, 17 Nov. 2006, Vol. 47, No. 23: p. 12.
http://www.guineeconakry.info/index.php?id=27&tx_ttnews[tt_news]=4075&tx_ttnew... 1/28/2009

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