JOHANNESBURG (miningweekly.com) – A local diamond beneficiation business, which obtained R97-million in funding from the State-owned Industrial Development Corporation (IDC) as well as support from the provincially run Gauteng Enterprise Propeller, has ceased operations, Mining Weekly Online can today report.
Mohseen Valli Moosa, a former South African Member of Parliament and brother of the former Cabinet Minister Mohammed Valli Moosa, was the founder and CEO of the five-year-old, 69-employee African Romance.
At the time of going to press, Moosa had not responded to the two messages Mining Weekly Online left on his cellphone.
IDC services sector divisional executive Katinka Schumann, who served as chairperson of African Romance, has not yet returned from leave and was also unavailable for comment.
But IDC spokesperson Neo Mokhesi told Mining Weekly Online that African Romance had obtained funding to the value of R97-million from the IDC and that an independent forensic review of the diamond-beneficiation company was expected to commence soon.
Mokhesi said that the board of African Romance had passed a resolution in December to place the company in voluntary liquidation but, as far as the IDC knew, the board had not yet applied for voluntary liquidation.
"African Romance has resolved to liquidate, and the IDC has no further comment. We await the outcome of the liquidation process," Mokhesi said in an emailed response to Mining Weekly Online's questions.
African Romance originally operated out of attractive premises in the heart of Sandton’s central business district and expected to be able to sell quarter-carat-and-above diamonds at globally competitive prices.
But Mining Weekly Online understands that after the IDC audited the company towards the end of last year, it was restructured and moved to premises in Wynberg, where intruders robbed employees at gunpoint on December 13 – the day before operations ceased.
It is understood that some former employees are now battling to process unemployment insurance claims and obtain what they regard as their full compensation.
When Mining Weekly featured African Romance on its cover in 2007, following its launch, Moosa expressed the view that the brand had the potential to, in time, stand alongside global giants like Gucci and Cartier.
Mining Weekly reported then that Moosa’s mining subsidiary, WakeMin, had an interest, as the lead black economic-empowerment partner, in 82 diamond exploration endeavours, and that African Romance distributed stock sheets and inventory to selected bulk buyers in Antwerp, Dubai and New York.
It was also stated that African Romance had won the support of the provincial development funder, the Gauteng Enterprise Propeller, and also Gauteng Tourism.
The former Department of Mineral Resources director-general Sandile Nogxina, now South Africa’s ambassador to Mexico, attended the launch, where he described the company as the actualisation of an African dream and urged other South African enterprises to follow its example.
At R60-million yearly revenue, African Romance was said to be exchange-rate proof and Moosa saw a near-term turnover potential of R200-million a year.
The R40-million invested in 2007 reportedly gave the then 120-employee company the capacity to polish 3 500 carats a month on a single-shift basis.
The operation had modern machines that were said to be able to do in minutes what conventional processing took hours to do, a barcode inscription system tracking every diamond from mine to manufacture.
It was a facility that set out to combine high technology with indigenous talent.
Then, in June last year, Lenasia-born Moosa, an attorney who had made a study of diamonds in Antwerp and at the local Harry Oppenheimer Diamond Training School in Johannesburg, told Mining Weekly that the South African diamond industry faced serious upstream and downstream challenges.
He opined further that the State Diamond Trader (SDT) had failed in its objectives and was not supplying diamonds suitable for polishing.
He accused the SDT of being too expensive and of failing to function in the manner that Parliament had laid down.