SA minister unhappy with De Beers

JOHANNESBURG – South Africa’s mining minister criticised a top official of diamond group De Beers on Friday for reportedly doubting the viability of boosting the local polishing industry.

South Africa and other regional diamond producers have been pressuring De Beers to distribute more rough diamonds locally to create jobs in the polishing and jewellery sectors. Jonathan Oppenheimer was quoted as telling a presentation that subsidies would be needed to promote the local sector since polishing costs in sub-Saharan Africa were around US$70 to US$100 per carat versus US$6-US$8 in India.”Unless the government is determined to subsidise that difference, the net benefit of selling those diamonds locally has to be measured against the net loss,” financial daily Business Day quoted him as telling business school students.Oppenheimer is a director of De Beers, the world’s biggest diamond group, and a member of the family that owns 40 per cent of the firm.Mining group Anglo American Plc owns 45 per cent of the company and Botswana government 15 per cent.Minerals and Energy Minister Buyelwa Sonjica said she was “disappointed” by Oppenheimer’s comments, especially since De Beers had previously supported the government policy of adding value to minerals instead of exporting the raw commodity.”One moment De Beers commits to beneficiation in this country.Next moment they are sending this message,” she said in a statement.Oppenheimer was also quoted as saying that De Beers would support government’s efforts, but would also work with them to show them the economic consequences of their decisions.De Beers spokeswoman Nicola Wilson said much of Oppenheimer’s talk at the Gordon Institute of Business showed a commitment to aiding local communities.References to beneficiation were only a small part of the talk.”De Beers is fully supportive and Jonathan is fully supportive of local benefication,” Wilson said.Under a new diamond law, De Beers must sell a certain portion of its production to a state diamond trader and also to local polishers to escape paying a stiff export duty.De Beers, which controls around half of the world’s diamond trade, has also agreed to help promote the polishing industry in neighbouring Namibia and Botswana, the world’s biggest diamond producer by value.Nampa-ReutersJonathan Oppenheimer was quoted as telling a presentation that subsidies would be needed to promote the local sector since polishing costs in sub-Saharan Africa were around US$70 to US$100 per carat versus US$6-US$8 in India.”Unless the government is determined to subsidise that difference, the net benefit of selling those diamonds locally has to be measured against the net loss,” financial daily Business Day quoted him as telling business school students.Oppenheimer is a director of De Beers, the world’s biggest diamond group, and a member of the family that owns 40 per cent of the firm.Mining group Anglo American Plc owns 45 per cent of the company and Botswana government 15 per cent.Minerals and Energy Minister Buyelwa Sonjica said she was “disappointed” by Oppenheimer’s comments, especially since De Beers had previously supported the government policy of adding value to minerals instead of exporting the raw commodity.”One moment De Beers commits to beneficiation in this country.Next moment they are sending this message,” she said in a statement.Oppenheimer was also quoted as saying that De Beers would support government’s efforts, but would also work with them to show them the economic consequences of their decisions.De Beers spokeswoman Nicola Wilson said much of Oppenheimer’s talk at the Gordon Institute of Business showed a commitment to aiding local communities.References to beneficiation were only a small part of the talk.”De Beers is fully supportive and Jonathan is fully supportive of local benefication,” Wilson said.Under a new diamond law, De Beers must sell a certain portion of its production to a state diamond trader and also to local polishers to escape paying a stiff export duty.De Beers, which controls around half of the world’s diamond trade, has also agreed to help promote the polishing industry in neighbouring Namibia and Botswana, the world’s biggest diamond producer by value.Nampa-Reuters