Programme Director
Representatives of the SADPO
Government officials
Members of the media
Esteemed guest
Ladies and gentlemen
Good morning
It gives me great joy to be here today as we engage on the promotion and development of the local diamond industry and have an occasion to collectively identify constraints to growth and recommend solutions to resolve the constraints in order to unlock the industry’s potential. We realise that no stakeholder alone can ensure that the industry is globally competitive and attracts more investment. For this to be achieved, all stakeholders must come on board. South Africa’s mineral sector is reviving with ongoing support and refinements of our progressive policies. Despite global challenges, our mining sector continues to attract growing investments. This has been affirmed by the latest Fraser Institute’s release of the annual global survey of mining jurisdictions, where South Africa has been recognised for improvements made in investment attractiveness and attractiveness of mining policies.
South Africa, in terms of the attractiveness of our mining policies, now ranks 56 out of 83 countries surveyed. In terms of investment attractiveness, we have improved and are now placed 43 out of 81 countries. Despite these improvements, we still have more ground to cover.
We remain committed to promoting and regulating the sector for transformation, growth and development, as well as ensuring that all South Africans derive sustainable benefit from the country’s mineral wealth. Our country faces a brighter and more promising prospects. We are excited about the future of our country as we see more investment into our economy. A recent example of this is the commitment by the mining sector at the Presidential Investment Summit, where the sector collectively pledged to invest almost R100 billion.
Diamonds are amongst the world’s major natural resources with an estimated US$13 billion worth of rough diamonds produced per year. South Africa is ranked as the 6th largest producer by volume. Approximately 15 percent by volume of the country’s rough production is sold locally to the cutting and polishing industry, while the rest is exported to various destinations, including India, Israel and Belgium, the three main diamond manufacturing and trading centres.
We have in our jurisdiction the most diverse range of diamond deposits in the world. As part of our commitment to investing in the growth of our country, we have developed key policies to promote and implement beneficiation of our raw materials especially diamonds. As no doubt you are aware Government developed and adopted a strategic policy document named “A Beneficiation Strategy for the Minerals Industry of South Africa”. This strategic policy provides a framework for the orderly development of the country’s mineral beneficiation value chain. The strategy identifies five key constraints to our local mineral beneficiation, namely; the limited access to raw materials; the shortage of critical infrastructure; limited exposure to research and development; inadequate skills; and lastly access to international markets.
To unlock these constraints, the strategy proposes a four-pillar framework. I urge all of us to critically assess and promote this framework so that diamond beneficiation becomes a major driver in advancing the empowerment of historically disadvantaged individuals in our country, as it presents opportunities for the development of new entrepreneurs in the small and micro businesses.
South Africa’s local beneficiation in the diamond and precious metals industries has significantly declined in the past decade. Of the 323 diamond beneficiation licences issued by the South African Diamond and Precious Metals Regulator (SADPMR), only 78 are active in the trade and beneficiation of diamonds. We will continue to work with all stakeholders to stimulate and increase local beneficiation. I call on you all to contribute out your ideas on how we can better achieve this.
I further urge all small-scale miners under the SADPO to comply with section 59B of the Diamond Act which provides for the offer of diamonds produced in a production cycle to the State Diamond Trader. I believe there are engagements happening around this matter to identify challenges in complying with the Act and find sustainable solutions. The ease of doing business has proven to attract investment, in this regard, the South African Diamond and Precious Minerals Regulator is looking at reducing the red-tape inasfar as registration as a Producer and authorised representatives with the Regulator are concerned. We are also looking to strengthen our relations with Diamond Trading Houses at which small-scale miners sell most of their production. We encourage all producers to use the Diamond Exchange and Export Centre to market their production through the Diamond Tender process.
The State Diamond Trader (SDT) continues with initiatives to increase the participation and employment in beneficiation including, raising the amount of suitable rough diamonds offered annually to ensure clients have security of supply. With only 15 percent of South Africa’s run of mine production being considered economical for local beneficiation, the SDT is exploring ways of making it economical to beneficiate an increased percentage of local run of mine production, thus increasing the amount of rough diamonds beneficiated locally.
The SDT prioritises Historically Disadvantaged South African clients, especially youth and women, when allocating diamonds. This will without doubt increase the amount of rough diamonds sold to black clients, to accelerate their growth and ensure that they are sustainable. We want to see at least 30% by mass of the rough diamonds sold by the SDT to black clients by 2023. In addition, the entity will ensure that there is a constant stream of new black diamond entrepreneurs entering the sector through its Enterprise Development Programme.
We believe that the future of the diamond industry in South Africa remains bright. There is still considerable potential for the discovery of other world-class deposits through modern exploration techniques in areas yet to be exhaustively explored. Furthermore, investment in state-of-the-art exploration technologies would enable new discoveries that conventional geological surveys could not find.
Research and development in modern diamond exploration techniques will therefore be critical in maximizing the potential of finding other world-class diamond deposits and can also be focused on ore bodies currently considered marginal or sub-economic.
We will continue to promote South Africa’s diamond industry globally, at for example the Hong Kong Jewellery and Gem Fair, to ensure that the country remains an attractive investment destination of choice.
Allow me to formally acknowledge and congratulate diamond mines for reporting no medical deaths in the year 2017. This proves that working together we can ensure the health and safety of mineworkers. Mining should not only look at production, sales and profit but should also look at the health and safety of mineworkers as well as the development of communities they operate in. As we go about in our operations, let us look at leaving positive legacies in the communities we operate in.
As I conclude I would like to urge all participants to remain committed to efforts to grow and sustain the diamond industry. I am confident that this conference will yield positive outcomes that will move the South African diamond industry forward, while ensuring that South Africa becomes the heartbeat of Africa’s beneficiation. I know that we will continue working together in all our stakeholder engagements for the benefit of all South Africans.
I thank you and wish you the best in your deliberations.