De Beers offers SA half of Diamdel

JOHANNESBURG – The world’s biggest diamond producer, De Beers, says it offered to give the South African Government half of its local sales unit Diamdel to help boost small, black-owned cutting firms.

It also has plans to create a marketing hub in Botswana by transferring key functions from London, but South African plans to revise its diamond law could block that, De Beers said in a statement ahead of testimony yesterday in parliament. De Beers is battling against the Government’s planned shake-up of the sector, aimed to stimulate more jewellery manufacturing and gem cutting in South Africa, the world’s fourth-largest diamond producer by value.De Beers argues that proposals to impose a 15 per cent export duty and to force diamond producers to sell stones to a state diamond trader would harm the sector and reduce investment.The Government’s aim to stimulate more black businesses in a sector still largely dominated by whites 11 years after the end of apartheid could be better promoted through Diamdel, it said.”In order to align Diamdel’s distribution policy more closely with government aims, De Beers has offered government a 50 per cent share in Diamdel, free of any consideration,” it said.De Beers, which controls around half of global diamond supply, distributes most of its diamonds through its international marketing arm, the Diamond Trading Company.The group currently ships all production from various countries like South Africa and Botswana to London, where the DTC creates a global mix, then distributes the supplies to cutters and traders around the world.But it also supplies 111 small and medium-sized businesses in South Africa through Diamdel, which sold US$71,6 million worth of stones last year.In its statement to a parliamentary committee, De Beers also gave more details about plans to open up a unit of the DTC in Botswana, the world’s biggest producer of diamonds by value.De Beers has previously said it was in talks with Botswana on a local marketing unit and in August, Botswana President Festus Mogae told Reuters the planned local DTC unit would bypass De Beers traditional mixing process.At the time De Beers declined to comment.In the statement, De Beers said it now wanted to move its international mixing functions to southern Africa, where most of the production takes place.”The DTC is proposing to move one of its core functions, aggregation, into the SADC region…the DTC is planning to establish the new diamond hub for the DTC in Gaborone,” it said.”(But) there are certain provisions in the Diamonds Bill that would inhibit aggregation of De Beers’ South African production taking place within the SADC region or at all.”It said the DTC would be undermined by the plans to establish a state diamond trader, force producers to offer output to a diamond exchange and to impose the export duty.-Nampa-ReutersDe Beers is battling against the Government’s planned shake-up of the sector, aimed to stimulate more jewellery manufacturing and gem cutting in South Africa, the world’s fourth-largest diamond producer by value.De Beers argues that proposals to impose a 15 per cent export duty and to force diamond producers to sell stones to a state diamond trader would harm the sector and reduce investment.The Government’s aim to stimulate more black businesses in a sector still largely dominated by whites 11 years after the end of apartheid could be better promoted through Diamdel, it said.”In order to align Diamdel’s distribution policy more closely with government aims, De Beers has offered government a 50 per cent share in Diamdel, free of any consideration,” it said.De Beers, which controls around half of global diamond supply, distributes most of its diamonds through its international marketing arm, the Diamond Trading Company.The group currently ships all production from various countries like South Africa and Botswana to London, where the DTC creates a global mix, then distributes the supplies to cutters and traders around the world.But it also supplies 111 small and medium-sized businesses in South Africa through Diamdel, which sold US$71,6 million worth of stones last year.In its statement to a parliamentary committee, De Beers also gave more details about plans to open up a unit of the DTC in Botswana, the world’s biggest producer of diamonds by value.De Beers has previously said it was in talks with Botswana on a local marketing unit and in August, Botswana President Festus Mogae told Reuters the planned local DTC unit would bypass De Beers traditional mixing process.At the time De Beers declined to comment.In the statement, De Beers said it now wanted to move its international mixing functions to southern Africa, where most of the production takes place.”The DTC is proposing to move one of its core functions, aggregation, into the SADC region…the DTC is planning to establish the new diamond hub for the DTC in Gaborone,” it said.”(But) there are certain provisions in the Diamonds Bill that would inhibit aggregation of De Beers’ South African production taking place within the SADC region or at all.”It said the DTC would be undermined by the plans to establish a state diamond trader, force producers to offer output to a diamond exchange and to impose the export duty.-Nampa-Reuters