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From Creamer Media in Johannesburg, I’m Shannon O’Donnell.

In our lead story this week:

The State Diamond Trader, or SDT, which government formed to buy up to 10% of South Africa's diamond production to sell to local cutters and polishers, has until June this year to prove itself financially self sustainable.

Further, the institution has a three-year period of access to the skills and experience of world dominant De Beers' rough diamond supply branch Diamdel experts, after which it will have to prove itself to be sufficiently skilled.

The SDT has been formed to create jobs by bolstering local value adding in the diamond industry, and to make stones available to smaller cutting and polishing outfits.

SDT CEO Abbey Chikane says that South Africa produced some $1,4-billion worth of rough stones in 2007, but only about 5% of the country's output is cut and polished locally.

Meanwhile, the Department of Minerals and Energy has hit out at unnamed diamond producers that are resisting legislation that gives government the power to buy 10% of all locally mined gems, calling them "selfish".

DME DG Sandile Nogxina:


JSE-listed ferrochrome producer Merafe Resources is studying the economic feasibility of cogenerating 40 MW of electrical power to ease its energy squeeze, says CEO Steve Phiri.

Phiri says that a Merafe technical team is hard at work on the use of offgas and other means of cogeneration of power in the wake of the Eskom power crisis.

Finance and new business director Stuart Elliot emphasises that the cogeneration initiative is still at an early stage that that the company is working closely with Eskom.

However, the company does not intend becoming involved beyond cogeneration and has no intention of building its own power plant.

Meanwhile, the power crunch has forced the Xstrata/Merafe Resources joint venture to push back its plans to double the capacity of its Project Lion ferrochrome smelter. The black-owned company has called on embattled Eskom to declare a "force majeure" on new big projects recently announced, as it does not have the required capacity.


Also in this week’s Mining Weekly online:

Aim-listed gem producer DiamondCorp says it will bring the second phase of underground production at its Lace mine in the Free State into production in the second half of 2008, one-year ahead of plans.

The company says that the mine is "at the mercy of Eskom" for now, but that it will start getting alternative power by midyear.



LSE-listed copper and cobalt producer Camec says that it will pay the Democratic Republic of Congo's, or DRC's, Gecamines $2-million, and raise the State-owned firm's share in their mining venture to 30% to secure its rights in that country.

The DRC government last year undertook a review of all mineral concessions in the country, only to find that not a single contract was without flaw.



State-owned coal firm Coal India plans to buy coking coal mines in Australia, Zimbabwe and Mozambique, and steam coal operations in Indonesia and South Africa in the next two years.



Consolidation of the global mining industry can be expected to continue, and more than likely at an accelerated pace in the current environment of high metals prices and input costs, Raw Materials Group president Magnus Ericsson says.



South African miner Harmony Gold will sell its prospecting rights on farms near its Tshepong and Target mines, in the Free State, to gold explorer African Precious Minerals, or APM, for $7,5-million.

Harmony will receive 1,5-million APM shares and 1,5-million half warrants for the Free State rights, as well as a 1,5% net smelter royalty on all minerals extracted, amounting to a maxinum amount of R150-million.

And in this week’s Mining Weekly magazine, out on Friday, read our cover story on former mining luminary Bobby Godsell, who speaks about national patrimony and the need for government, business and labour to do more.

We also report that Africa’s biggest gold-miner, AngloGold Ashanti, believes the power shortage in South Africa is manageable, and how Gold Fields will accelerate infrastructure development and cut back production at its South Deep operation.

Finally, don’t miss our feature on valves.

That’s a round up of this week’s stories on Creamer Media’s Mining Weekly. For more on these and other stories, visit miningweekly.com