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Diamond Buyers Club

Sebastiao Pedro struck it lucky in 2014 when, as a 21-year-old small-scale miner, he found a large red ruby in northern Mozambique. He sold it to a buyer from Vietnam for $43,000, returned to his family 900 miles away and built a house with the proceeds.

Then the money ran out.

This year he went back to Montepuez, home to the world’s biggest known ruby deposit, hoping to find another small fortune. He was disappointed. A crackdown by the authorities has seen thousands of local diggers and traders arrested. Hundreds of others from as far away as Thailand have been deported.

“The situation is difficult because the police have been sending people away and the concession areas are full of company security and we can no longer work,” Pedro said as he and five fellow diggers in dust-stained clothes scratched around in the gravel beside a small dam.

A few hundred yards away is Gemfields Group Ltd.’s ruby operation. After a woodcutter discovered a shiny red stone there in 2009, as many as 10,000 people from all over the world descended on the dense woodland, digging and trading rubies, or offering goods and services to those doing the mining.

“It looked like a gold rush in the Wild West,” said Gemfields Chief Executive Officer Sean Gilbertson, son of Brian, the one-time CEO of the world biggest miner BHP Billiton Plc. “There was a lot of violence, a lot of criminality.”

‘Traffic Light’

Four years ago, Pedro would sneak into mining concessions and dig up gravel containing the precious stones. Now it’s too dangerous, so he and his colleagues wait for other informal miners who are able to get into the mining areas to bring back sacks of dirt — waste that’s...

Read more from our friends at Mining.com

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