Conflict diamonds are bad because of the dangerous and often fatal conditions that workers are forced to work in while they are mining these diamonds. In addition, the money for these diamonds generally doesn’t go to the people of the country mining them, it goes to a rich person overseeing the operation (which could be someone form that country, or a person from an outside country, but the point is the people risking their lives to mine the diamonds do not get anything for it).
I recommend watching the movie Blood Diamonds. It will make you see the diamond industry in an entirely different light. I saw it for the first time this year and my it was amazing.
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