A spokesperson for the SDT told Mining Weekly that no acting CEO had been appointed, but “measures have been put in place”, and the business of procuring rough diamonds continued as usual.

The CEO for the SDT was to be appointed by the Minister of Minerals and Energy, although the department could not confirm when this would happen. DME spokesperson Bheki Khumalo said the department was not obliged to give reasons as to why Chikane’s contract was not renewed.

The SDT was established to buy 10% of the country’s diamond production for sale to local cutters and polishers, in an attempt to boost local beneficiation and job creation.

However, the organisation has fallen short of meeting its aims.

Diamond giant De Beers was said to be the only mining company that was supplying rough stones to the SDT. About 3% of De Beers’ production was sold to the SDT.

DiamondCorp MD and CEO Paul Loudon told Mining Weekly that representatives from the SDT attended the DiamondCorp tenders, although they never bought any rough stones from the company. The DiamondCorp stones were generally smaller as they were from tailings operations.

“Because of what’s been going on and because of what we deem to be a crisis in the indus- try, not only because of the State Diamond Trader, but because of a host of other factors, we [will be] having an industry workshop on October 13, to try to plot the way forward, identify the problems, find solutions and a sustainable growth scenario,” World Federation of Diamond Bourses president Ernest Blom told Mining Weekly.

In July, it was reported that the SDT was awaiting approval from the National Treasury to increase its borrowing power from the current R35-million, to R100-million, a cycle. Increasing the budget would enable the diamond trader to buy more rough stones to supply local cutters and polishers. However, as approval had not yet been received, there was uncertainty as to how the organisation would operate going forward.

Industry In Crisis

South Africa’s largest diamond cutting, polishing and training facility, Zurel Bros SA, in Polokwane, has had to start a retrenchment process at its state-of-the-art facility, which employs 338 people, because it does not receive enough rough diamonds through the SDT to make the factory economically viable.

The facility was established in 2005, with the intention of procuring rough stones from the SDT, and millions were spent on the upgrade of the facility. Zurel Bros SA requires about 1 200 ct/m to make its factory economically viable; however, the company has received about 300 ct/m of very small diamonds from the SDT.

“We have all the necessary accreditations, and certificates, and awards of excellence – our institute is a benchmark for the industry; however, it’s all pointless without enough rough diamonds,” Zurel Bros SA GM Norman Landman told Mining Weekly.

“We have approached our local government, the DME, and the SDT on many occasions for assistance. We were assured that they are working on the problem; how- ever, it’s getting worse: the SDT has virtually come to a standstill with regard to buying rough, and when they do buy rough, it’s either not enough for the industry, or it’s not economically viable rough, or they can’t buy all the rough made available, because they don’t have enough funds from the Industrial Development Corpora-tion (IDC),” he added.

Landman noted that companies had even offered to give the SDT the money to buy the rough diamonds from the mining companies, and then buy them back from the SDT. The SDT said the funding had to come from the IDC, and companies should remain patient.

“We have been living on promises. The SDT is a great idea, but it is just not working. It could really be great if it was well managed,” commented Landman.

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