The Department of Minerals and Energy (DME) on Friday hit out at unnamed diamond producers that were resisting legislation that gave government the power to buy 10% of all locally mined gems, calling them "selfish".

DME DG Sandile Nogxina said that the mining companies that were taking the department to court over this issue were "trying to protect their own privileges".

He said that this was something that government could not allow to happen, in answer to a question from Mining Weekly Online.

Nogxina declined to name the companies, saying: "they know who they are".

In December last year, newswire Reuters reported that the South African Diamond Producers Organisation (Sadpo) had served papers on the Minerals and Energy Minister Buyelwa Sonjica, citing the group's chairperson.

Reuters quoted Sadpo as saying that some 200 independent miners risked being put out of business, and that having to sell 10% of their output to the State Diamond Trader (SDT) would bankrupt them.

PRICING

Meanwhile, SDT CEO Abbey Chikane said that the diamond producers would present their prices to a government evaluator, which would then have to agree or disagree with the price.

If the two disagreed, then an independent evaluator would be called in, who would be able to fix a final price, which the producer would then have to agree with, he stated.

SDT chairperson Linda Makatini said that the organisation would get its revenue from marking up the stones that it sold on to cutters and polishers, but would not aim to be "a rich State entity with so much money in our pockets".

Rather, its focus would be on making sure that rough diamonds were available to the market, which previously did not have access to them.

To subscribe to Mining Weekly's print magazine email subscriptions@creamermedia.co.za or buy now.