VENETIA (miningweekly.com) – The creation of a State-enabled precious metals and gemstone bourse was under consideration to replace South Africa’s State Diamond Trader, which had failed to deliver as a standalone entity, Mineral Resources Minister Susan Shabangu has revealed.
The government created the State-owned State Diamond Trader six years ago to allow historically disadvantaged South Africans to add value to 10% of the diamonds mined in the country.
However, it has come under criticism for failing to supply polishable rough diamonds to local producers at competitive prices.
Responding to Mining Weekly Online at a media conference after the Venetia underground diamond mine launch, Shabangu said that consideration was being given to an overhaul of the work of the State Diamond Trader as well as a review of the entire regulatory framework for the precious metals and diamond jewellery industries.
“The State Diamond Trader indeed has weaknesses, which we have identified. That’s why what we are looking at is how to reposition the State Diamond Trader in a way that will make it viable, ”Shabangu told Mining Weekly Online.
Linked to this was the envisaged introduction of an exchange incorporating all precious metals and minerals.
“What we anticipate we may have in future is what in other parts of the world is referred to as a bourse, where your precious metals and gemstones are exchanged.
“That’s our next phase in dealing with the issue of the State Diamond Trader because the challenge is that you can’t deal with what needs to be done just as a diamond trader.
“You’ve got to look far more holistically and broader to play a significant role in the area of beneficiation.
“We also can’t confine ourselves just to cutting and polishing. We’ve got to look at the entire value chain and we know that diamonds without jewellery mean nothing,” Shabangu added.
In the development of a bourse, the State would continue to regulate and to create an enabling environment.
The State would also be required to open up opportunities to attract more participants into the field by dealing with value added tax (VAT) impediments.
“Among the issues are tax issues, when you deal with diamonds, issues of VAT, and we have to consider the kind of mechanisms needed in future to make diamond beneficiation a viable proposition in South Africa,” Shabangu added to Mining Weekly Online.
Shabangu hosted South Africa’s first National Jewellery Forum in Johannesburg on Wednesday, which brought together mining and jewellery manufacturing associations and government, with the view to creating entrepreneurs with the requisite skills to enable South Africa to become a jewellery hub, as announced in the Minister’s Budget Vote speech in May.
Jewellery manufacturing is one of the five value chains identified in the beneficiation strategy approved by Cabinet in 2011.
A curriculum for entrepreneurial jewellery design and manufacturing is to be offered at further education and training colleges and financial support is mooted for designers and manufacturers.
The Minister, who defined beneficiation to include the fabrication of finished products for sale to consumers, described South Africa’s minerals as a strategic resource that had the potential to benefit the entire population through secondary and tertiary mineral-based industries.
“The beneficiation process includes large-scale and capital-intensive operations like smelting and technologically sophisticated/advanced refining as well as labour-intensive activities such as the craft of jewellery,” Shabangu said.
“We want to break with the job-seeking mentality and nurture and develop empowered, vibrant, excited self-employed jewellery entrepreneurs who are hopeful about a better life.
“We want to promote and stimulate jewellery manufacturing in South Africa,” Shabangu added.