The local diamond 
industry could assist 
in the alleviation of poverty and add to the country’s gross domestic product (GDP), says diamond cutting and polishing business Masingita owner MacDonald Temane.

He says that the county could benefit from a better appreciation of the value of the diamond industry in South Africa, especially in terms of job creation and poverty alleviation.

Global rough diamond sales amounted to about $10-billion last year, which could be doubled or tripled by creating final products that could contribute significantly to South Africa’s GDP. He adds that 65% of diamonds produced globally are produced in Southern Africa and is concerned that poverty levels have not decreased in proportion to these figures.

Temane believes that there is an unwillingness from government to invest significant funds into the diamond industry, even though the return on the investment will contribute to the country’s growth.

He says that the Industrial Development Corporation (IDC) and other local agencies should become further involved in the local diamond industry. The IDC has invested about $5-million into the industry, which is a start, but does not have much of an impact on the diamond industry. Temane believes that the IDC should invest at least $100-million, taking into account the size of the industry.

Temane adds that government and the South African Diamond and Precious Metals Regulator should empower South African diamond companies by adding a promotional function to its regulatory function. He says that he hopes for the decolonisation of the local diamond 
industry, as foreigners are still too involved in it.

He explains that decolonising the economy means local companies complete the diamond pro-
cess from start to finish. South Africa has the skills, but there is a lack of will in focusing on the trade.

Temane comments that the South African diamond industry does not leverage its full power globally. He says that the country’s potential is evident in the Kimberley Process certification scheme development, which was spearheaded by South Africa and primarily influenced by South Africans, and established an 
international process to ensure trade in diamonds do not fund violence.

“South Africa has a lot more to offer than we give it credit for and, in general, I just hope that government will acknowledge this,” says Temane.

He notes that Botswana is a good example of a country using its diamond resources to alleviate poverty and contribute to 
empowering its citizens. He says that it is important that government formulates a strategy that 
includes coordinating diamond mining, manufacturing of products and reselling the finished products.

South Africa should also start collaborating with other African countries and their diamond 
industries to alleviate poverty on the continent as a whole.

Meanwhile, Temane comments that, although sales have dropped by about 50% in the diamond trade, prices have held fairly well through the global financial 
crisis. He says that the prices were the lowest in February, but have been increasing since then.

He adds that, if a diamond supply deficit occurs by 2012, it will be positive for the diamond trade, as prices will increase as the precious stones become 
rarer.

Diamond Academy
Temane says that Masingita is planning on supporting a new diamond academy in conjunction with one or more South African universities. The company is currently negotiating the development of a diamond degree with several institutions. He says that South Africa is well positioned to tackle the lack of diamond training, and to train people from the entire continent and there is no reason why it cannot offer a first-class diamond degree.

The academy will teach all 
aspects of the diamond industry, including geology, prospecting, processing and polishing, the commoditisation of diamonds, the diamond market, diamond sales, the financial aspects and global stock movements.

He says that, ideally, three universities from around South Africa will become involved and he aims to start the academy at the beginning of 2010. The practical aspects will take place at Masingita’s factory, in Johannesburg, and the theoretical aspects will be taught at tertiary institutions.

He comments that the academy should be an initiative of government and the South African Diamond and Precious Metals Regulator, which should concentrate on diamond education and promoting the local industry.

“I truly believe that if the coun-
try is serious about poverty alleviation, the diamond industry has some means to assist. Government should let the 
industry take full advantage of the natural resources available to contribute to building a better 
country,” concludes Temane.

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