'It is by the grace of God that you find a diamond'

Breaking news from the markets: 'It is by the grace of God that you find a diamond'15 minutes ago Share Save Add as preferred on GoogleEd ButlerBusiness reporter, Kono, Sierra LeoneAFP via Getty ImagesDiamond miners in Sierra Leone can hunt for days on end and find none of the precious stonesThe rising popularity of lab-grown diamonds has caused a big fall in the price of the mined gems. In the West African nation of Sierra Leone the country's biggest diamond mine has closed. Stripped to the waist, men toil in the heat of the sun.

The mud in the pit is sifted and shovelled. Daniel, the foreman in this remote, informal, small-scale mine in Kono, the diamond region of Sierra Leone, shows me the gravel he's picking through with his fingers. "We put it in water and we wash it," he says.

Economic Details

"If there is anything like a diamond or any bright stone, we can see it. "Daniel and five others are searching for just tiny fragments, but pickings are thin. "I have not made a lot of money yet," he says.

"Sometimes for the whole of the year you can't get anything. "It is by the grace of God that you find a diamond. We are just dreaming, really.

We still have that hope. " Business Daily: Diamonds' uncertain futureSierra Leone: The diamond that saved a thousand livesSuch informal mining has increased in Kono following the closure last year of the country's biggest diamond mine Koidu Holdings. It shut with the loss of 1,000 jobs after a bitter industrial dispute over the miners' pay.

Analyst Views

Officially the company says it closed due to the cost of the dispute and security concerns, but privately, insiders also acknowledge that the weakness of the global market also played a role. In just the past four years, the retail price of polished natural diamonds has fallen some 40%. The main driver has been the rapid growth of the so-called lab-grown diamond industry.

These factory-made diamonds, produced from crystalised carbon, are chemically and physically identical to mined diamonds. Manufactured mostly in India and China using two different technologies – HPHT (high pressure high temperature) and CVD (chemical vapour deposition) – they cost a fraction of the price, up to 70% less. Kono's governor, Augustine Shekho, says the big fall in the global price of natural diamonds has hit the region hard over the past five years.

"Lower diamond values have reduced earnings for miners, constrained investment, and weakened local economic activity. "Getty ImagesLab-grown diamonds have the same chemical composition as those naturally formedDiamond mining has been the lifeblood of this part of West Africa since the 1930s. Thirty-five years ago it became the focus of a brutal, long-running civil war in Sierra Leone, immortalised by Leonardo Di Caprio in the 2006 Hollywood film Blood Diamonds.

Financial markets are tracking the development closely as investors assess the likely impact.