JOHANNESBURG (miningweekly.com) – In an industry that’s plagued by a lack of development and depleting assets, diamond exploration, evaluation and mining geologist Dr John Bristow has called on the industry to be driven by small-, medium-sized and microenterprises (SMMEs).
Speaking at the South African Diamond Producers Organisation (Sadpo) conference, in the North West, on Friday, he said that if the South African diamond mining industry should be developed to be driven by SMMEs, it would have an overall positive impact on the South African economy and overcome some of the job creation and transformation challenges facing the country.
South Africa, which has many low-grade diamond deposits, should use the global shortage of quality diamonds as an opportunity to not just alleviate the issue of depleting assets, but also SMMEs and entrepreneurs to unlock the skills and expertise that currently remains unexplored in the country.
However, while the global natural diamond shortage provides an opportunity for South African diamond mining, Bristow warned that synthetic diamonds could pose a threat.
The risk, he tells Mining Weekly Online, is from an impact perspective, especially considering that a lot of small diamonds are currently being manufactured globally.
“I don’t see [synthetic diamonds] as being [entirely] bad for the industry . . . I think they can play an important role in creating more knowledge and exposure to get more young people into the business,” Bristow elaborated, adding that manufactured diamonds are generally more affordable than mined diamonds.
“Synthetic diamonds undoubtedly have a place, but here in South Africa, we need to use the decline in natural big diamonds as an opportunity to encourage [increased diamond mining]”.
This, he added, would be where small and junior miners would come into play.
According to Bristow, small and junior miners are “very good at taking and mitigating risks”, while larger mining companies are more focused on reducing risk.
“This country needs to encourage its entrepreneurs to spend money, be they local or foreigners, and to invest and explore the country,” he explained, adding that “quite often, small deposits turn into something much bigger”.
When this happens, these projects are usually sold to larger mining companies. In effect, this would mean that encouraging investment and development of small and junior miners in diamond mining, would ultimately become a beneficial endeavour for all industry players.
However, Bristow lamented that challenges – such as policy uncertainty and corruption – quite often make it more difficult for new entrants in the market. Unfortunately, these challenges are expected to linger for a while.
Other challenges for all miners, and not just those in the diamond sector, include dysfunctional governance, an ineffective mineral rights system and a lack of ease of access to geological information.
Good and flexible mining policy is, effectively, what is needed for small miners to become successful, he stressed.
In this respect, Bristow noted that a healthy partnership between government, regulators, mining companies and environmentalists, is needed to help curb, and resolve the industry’s challenges.
This should, in turn, assist South Africa in achieving its transformation goals and objectives.
Bristow believes that despite the environment being somewhat challenging at this stage, and that not all is lost, he warned that lot of these anticipated changes and initiatives will wait, along with the rest of the country, with bated breath for the results of South Africa’s National Election, which will have a large impact on the country’s way forward.
South Africa’s National Elections will be held on May 8.