Argyle Diamonds: The Political Economy of a Lost Resource

Abstract

The discovery of the Argyle diamond field in the north of Western Australia during the late-1970s heralded a new phase in Australia's mining history. Initial forecasts rated Argyle's potential output as internationally significant. Even before full-scale mining commenced it was clear that production from Argyle would pose a serious challenge to the South African-based diamond marketing cartel - De Beers. De Beers, through its strategic holdings in a range of foreign and Australian mining companies, worked to bring Argyle production under its control. Despite its strong criticism of the manner in which the Fraser government dealt with the development of Argyle, when in government, Labor too seemed unwilling to exercise regulatory controls. Eager to encourage foreign investment the Federal and State Governments permitted South African mining interests to arrange the terms and conditions for the mining and marketing of Argyle diamonds free from significant public scrutiny.