Changes in SA diamond sector

CAPE TOWN – South African Mining Minister Lindiwe Hendricks has dismissed industry concerns about a pending shake-up of the diamond sector and urged players to participate in upcoming public hearings on a proposed law.

The government wants to establish a state diamond trader to open up distribution of diamonds, but Hendricks told a dinner at a mining conference late on Monday that recent criticism has been misplaced. “We feel that these comments have been based on lack of information.However …everyone has an opportunity to voice their opinions at public hearings that are going to take place in parliament,” Hendricks said.An amendment to the Diamond Act was part of the government’s strategy to promote value-added manufacturing of South Africa’s minerals to create jobs and boost economic growth, she said.Changes were needed in the diamond sector to help struggling small diamond cutting companies having difficulty finding enough supply of rough diamonds, the minister said.She urged those small players to be vocal during the public hearings that are due to start on October 10, she added.”It is particularly important for me that those companies that …are presently struggling to get access to the rough must express their concerns.”Currently, most distribution of rough diamonds is tightly controlled by De Beers, 45 per cent owned by Anglo American De Beers argues that keeping close control of distribution is key to promoting the luxury aspects and high prices of natural diamonds, which are coming under competition from synthetic articles.Hendricks said the government’s drive to promote manufacturing of diamonds in South Africa – the world’s fourth largest producer by value – was key to the new law.”We need to get stakeholders to understand we are concerned by the fact that too much of our mineral resources are exported without any value addition …it is a closed shop of a few people who can only access the best diamonds,” she said earlier in the day at a news conference.Those worried about the creation of a state diamond trader say state intervention could undermine the sector, but the head of the South African Diamond Board told Reuters during the dinner that this should not be a concern.”It will all be demand driven,” board Chief Executive Louis Selekane said.”We don’t want to do anything that would harm the market.”The proposed diamond trader would likely start on a small scale, only handling enough diamonds to provide materials to those largely shut out from distribution, he added.- Nampa-Reuters”We feel that these comments have been based on lack of information.However …everyone has an opportunity to voice their opinions at public hearings that are going to take place in parliament,” Hendricks said.An amendment to the Diamond Act was part of the government’s strategy to promote value-added manufacturing of South Africa’s minerals to create jobs and boost economic growth, she said.Changes were needed in the diamond sector to help struggling small diamond cutting companies having difficulty finding enough supply of rough diamonds, the minister said.She urged those small players to be vocal during the public hearings that are due to start on October 10, she added.”It is particularly important for me that those companies that …are presently struggling to get access to the rough must express their concerns.”Currently, most distribution of rough diamonds is tightly controlled by De Beers, 45 per cent owned by Anglo American De Beers argues that keeping close control of distribution is key to promoting the luxury aspects and high prices of natural diamonds, which are coming under competition from synthetic articles.Hendricks said the government’s drive to promote manufacturing of diamonds in South Africa – the world’s fourth largest producer by value – was key to the new law.”We need to get stakeholders to understand we are concerned by the fact that too much of our mineral resources are exported without any value addition …it is a closed shop of a few people who can only access the best diamonds,” she said earlier in the day at a news conference.Those worried about the creation of a state diamond trader say state intervention could undermine the sector, but the head of the South African Diamond Board told Reuters during the dinner that this should not be a concern.”It will all be demand driven,” board Chief Executive Louis Selekane said.”We don’t want to do anything that would harm the market.”The proposed diamond trader would likely start on a small scale, only handling enough diamonds to provide materials to those largely shut out from distribution, he added.- Nampa-Reuters