SA to set up state diamond trader
12 February 2007The government is to set up a new state-owned diamond trading company which will buy 10% of locally produced diamonds for resale on the South African market, helping to develop local diamond cutters and polishers.
Announcing the move in his State of the Nation address to Parliament in Cape Town on Friday, President Thabo Mbeki said it was in line with government's National Industrial Policy Framework, which aimed at increasing mineral beneficiation in the country.
The policy also promotes strategic state intervention in the agriculture, agro-processing, pharmaceutical and white goods sectors, as well as in creative industries and community and social services.
"This must include a determined drive to increase the country's capacity to produce capital goods," Mbeki said.
Mbeki said the government was happy that diamond giant De Beers had agreed to assist with management, technical skills and asset provision over the first three years for free.
In terms of the agreement, the West Coast operations of state-owned Alexkor and Namaqualand Mines, owned by De Beers Consolidated Mines, will be merged into a single independent diamond mining company.
According to both parties, the new company will be well positioned to realise the full economic potential of the West Coast diamond mining industry.
"De Beers' competitive advantage is in our ability to engage in real and lasting partnerships with governments, ensuring that diamonds continue to help diamond producing countries like South Africa," De Beers Group chairman Nicky Oppenheimer said in a statement.
The company is set to spend R2.2-billion in capital investment in new mines and new exploration activities in South Africa.
Minerals and Energy Minister Buyelwa Sonjica welcomed the initiative, saying it would create a positive image of the diamond industry in South Africa.
"This represents an important step forward for the communities along the West Coast, the people of South Africa and De Beers, who will all benefit from a consolidated mining operation which has been founded in the spirit of partnership," Sonjica said.
Source: BuaNews
