BUSINESS NEWS
Bill could transform diamond trade
Posted Thu, 13 Oct 2005
The draft Diamond Amendment Bill provides an opportunity to transform the "unique" diamond trading structure evolved over more than 100 years, according to empowerment company Khadima Mining.
Khadima Mining is one of various bodies to make presentations to the National Assembly's minerals and energy committee during its hearings this week on the bill.
Khadima representatives, led by director Khapametse Maleke, said this structure entailed moving diamonds and other minerals from the poorest, yet naturally endowed African continent, to the "rich consumers on the other side of the globe".
It had robbed South Africa of its rightful place among the giants of the global industry, and relegated its people to continual underdevelopment through carefully orchestrated myths and structures aimed to serve the privileged few.
The draft bill provided "freedom at last", they said. South Africa was endowed with an abundance of mineral resources, including 70
percent of the world's gold and platinum resources, and was the fourth largest producer of diamonds by value.
Yet, the country experienced difficulties in developing significant downstream industries to add value through beneficiation, such as polishing, cutting, jewellery manufacturing, branding and marketing.
The jewellery industry produced less than one percent of the world's jewellery, but South Africa produced 16 percent of global minerals. Only 2000 workers were currently employed in the polishing industry.
Most of South Africa's rough diamonds were sent to London where they were mixed with other goods. It was a disingenuous myth that it was not economically viable to polish diamonds in Africa.
As a consequence of this untruth, South Africa had through history lost billions of rands in revenue, jobs, skills transfers and unique branding opportunities.
Sales of rough diamonds from global miners worth $11.3-billion last year equated to
$16.7-billion of retail sales.
The draft bill would increase the processing and manufacturing volume of the industry, turn South Africa into a leading player in all phases of the diamond pipeline, add financial value to local production, and create jobs.
It would also help entry of emerging diamond polishers and jewellery manufacturers through the BEE policy.
Among other things, the bill would foster investment into and development of local industry, release the country from controlling and interested parties, bring control over rough diamonds and processing, and guarantee equitable access to rough diamonds.
Khadima intended maximising the value of rough diamonds in South Africa, by establishing diamond cutting and jewellery manufacturing factories in both economically deprived rural areas and urban centres.
• Khadima Mining is a partnership between the Israeli Leviev Group's LLD Diamonds and black South African interests. Leviev is the
world's largest diamond manufacturer by value with an annual turnover from diamond trade in excess of $2.5-billion.
Sapa
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