The State Diamond Trader (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, an official said at its official launch on Friday.

Further, the institution had 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 would have to prove itself to be sufficiently skilled.

Department of Minerals and Energy DG Sandile Nogxina, who was speaking on behalf of Minister Buyelwa Sonjica, lauded the SDT as a "dream come true for diamond cutters and polishers" and a model that would "be emulated by many countries".

SDT chairperson Linda Makatini said that the body would make sure that every diamond that it sold was beneficiated locally.

JOB CREATION

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

However, Makatini could not quantify how many jobs government was hoping to create in the sector, only say "as many as we can".

SDT CEO Abbey Chikane said that 2007 figures showed that South Africa produced some $1,4-billion worth of rough stones, and that the industry currently supported 2 300 jobs.

He said that only about 5% of the country's 2007 mine output was cut and polished locally.

Chikane said that it would be necessary to first analyse the outcomes of the pilot project before projecting how many jobs could be created through the SDT.

The organisation started the pilot project late last year, and got approaches from 78 companies to buy packages of stones, 66 of which were small-to-medium sized firms.

Meanwhile, State-owned financier the Industrial Development Corporation (IDC) has provided R65,5-million worth of funding to the SDT, and said that it could provide up to R1-billion if need be.

IDC resources divisional executive Ufikile Khumalo said that the organisation was also keen on providing funding to the cutters and polishers that wanted to purchase stones from the SDT to beneficiate locally.

REGULATOR

Also officially launched on Friday was the South African Diamonds and Precious Metals Regulator, chaired by Steve Phiri, would aim to promote beneficiation and the equitable access to diamonds and precious metals.

"At the same time it ensures that all industry participants are compliant with the Kimberley Process certification scheme," Nogxina said.

He added that the regulator would begin rolling out its strategy in April.

South Africa is the world's third-largest diamond producer, with a yearly output of some 14,5-million carats.