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Diamond-cutting and -polishing industry in distress
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7th June 2013
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The South African diamond-cutting and -polishing industry is in distress, states World Federation of Diamond Bourses president Ernie Blom, pointing out that, 20 years ago, the industry had 4 500 polishers – currently, there are fewer than 600.

Blom notes that to bring the industry back to its former glory, government needs to understand what is preventing industry growth.

“The relationship between government and industry needs to be developed more. A major factor inhibiting growth and causing the industry to shrink is the lack of consultation from both parties,” he says, adding that industry and government need to identify factors that should be dealt with on a multilateral level.

Blom states that the industry in South Africa is not globally competitive and steps need to be taken to reintroduce the industry to the international arena.

“The labour force needs to be trained to acceptable global standards, which are currently very high. We have to embark on sustainable training strategies for diamond partners – not short-term solutions that have no real impact.

“The constraints, the exchange-control regulations, the supply of rough diamonds and the challenges in the operating environment need to be identified and addressed accordingly,” he says.

Meanwhile, Blom states that the develop- ment of various computer and software analysis programs, used in the cutting and polishing of rough diamonds, are a breakthrough for the industry.

“The technology is designed in Israel, India and Belgium, as those countries are the leaders in and innovators of diamond cutting and polishing technology, and has improved a lot over the past year,” he says, adding that the tools and automated machines for the polishing of rough diamonds have also under- gone major improvements.

Blom states that the value of the rough- diamond-mining industry in South Africa is $1.4-billion a year, which puts the country in fourth place in the world.

“The largest producers by value are Botswana, Russia, Canada and South Africa,” he notes.

He explains that, in South Africa, the demand for education and skills training is big but that training facilities, mostly in-house, are not equipped to provide market- able skills that can be used worldwide.

“Training is mostly done in Johannesburg at the Oppenheimer Academy. Further, mineral processing and metallurgical engineering products and services company Mintek is also conducting low-key research aimed at finding the origin of rough diamonds, but research mostly takes place in India, Russia and Belgium,” he states.

Blom adds that China and the Asian Rim countries also have excellent training facilities.

He notes that the biggest potential for growth lies in the beneficiation sector, if coupled with correct training.

“Globally, the industry is robust and has fully recovered from the 2008 recession. India’s cutting industry is currently the largest, with one-million cutters, while China’s industry has grown from having no cutters 20 years ago to having 60 000 cutters, and Botswana’s cutters increased over the past years from 300 to 3 000,” he states.

Blom explains that consumer demand and supply, driven by India and China, have increased in terms of polished diamonds and diamond jewellery.

“The local industry is going to face supply and demand constraints in the next ten years, as a result of consumer demand outstripping the supply of rough diamonds. Currently, there are no new mines in place to mitigate that.

“South Africa’s industry is mature – it is not growing like Angola’s and the Democratic Republic of Congo’s. Industry heavyweights should begin working on solutions for the supply and demand challenges they will face in the future,” he concludes.

Edited by: Megan Wait

 

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ERNIE BLOM The industry in South Africa is not globally competitive
 

ERNIE BLOM The industry in South Africa is not globally competitive