Local jewellery manufacturers will, through the newly launched R100-million Gold Loan Scheme, have the opportunity to access loans at an interest rate of 3% to buy the gold they need to make jewellery.

Trade and Industry Minister Dr Rob Davies launched the scheme this month. The funds for the scheme were sourced from the Manufacturing Competitiveness Enhancement Programme’s industrial niche projects fund, which is managed by the Industrial Development Corporation.

Manufacturers will be allowed to apply for a loan to buy between 4 kg and 10 kg of gold per loan agreement.

“Jewellery manufacturers will need to tie up their working capital for two months from the time of acquisition of the gold until the time the jewellery products are sold in order for the fund to increase, possibly sixfold,” said Davies, adding that the initiative will lend support to local jewellery manufacturers.

He noted that the latest figures indicate that there are about 1 000 jewellery manufacturers left in the country and that production is down to 3 500 kg per year from 7 500 kg in 2004.

Davies also said the jewellery sector experienced imports exceeding R1-billion in 2013, while exports were sitting at R467-million in the same year.

He commented that the local sector is not taking full advantage of opportunities that exist under trade agreements with other countries or regions.

“For example, in the African Growth and Opportunity Act, we have the opportunity to export jewellery products to the US and we would like industry to use these types of opportunities to their advantage,” Davies explained.

He further noted that the Gold Loan Scheme is one of many different interventions [by government to support the local manufacturing sector].

“We also stand ready to support a number of other initiatives that would support jewellery manufacturing as part of our broader efforts to promote greater value and beneficiation of our mineral resource base,” he stated.

Jewellery Council of South Africa chairperson Chris van Rensburg said the launch of the Gold Loan Scheme will lead to the creation of a sustainable local jewellery market.

“Hopefully, this scheme will also lead to beneficiation and multilevel job creation,” he added.

He pointed out that between 80% and 90% of jewellery consumed in the local market is imported and that the scheme could lead to an increase in local content.

“I would like to see the Department of Trade and Industry acknowledge the importance of import replacements; it should carry the same initiatives as exports. With that we can quadruple our employment capacity within the next ten years,” he concluded.