No Hold Barred
By: Nelendhre Moodley
In a bid to create a thriving diamond beneficiation and manufacturing sector in South Africa, The State Diamond Trader (SDT) has tabled a number of initiatives including collaborating with Southern African Development Community (SADC) countries for an improved diamond trading platform and establishing a hub at OR Tambo Airport to better service the international market, SDT CEO Mandla Mnguni tells SA Mining in an exclusive interview.
“Given the rise of the middle class both in Africa and Asia, the time is ripe to invigorate the local diamond and jewellery beneficiation sector,” he says.
The entity’s mandate is to grow South Africa’s diamond cutting and polishing industry and to enable increased participation by historically disadvantaged South Africans in the diamond beneficiation industry.
Although the SDT is empowered to purchase up to 10% of the run-of-mine (ROM) production from all diamond producers in South Africa.
Given the entity’s desire to augment gem-quality diamonds, the entity is considering the possibility of collaborating with its neighbours who are renowned diamond producers within SADC and the rest of Africa.
“Collaborating with our neighbours will improve our ability to acquire a steady stream of gem-quality diamonds that we can offer to our clients. In turn, this will help our clients lift their revenue-generating ability and ultimately rev up the local economy.”
According to Mnguni, while South Africa produces between eight and nine million carats a year, only 15% by volume of those rough diamonds are deemed economically viable to be beneficiated locally.
“The vast majority of diamonds produced in South Africa falls in the category of near gem and smalls; these are exported to India for cutting and polishing.”
The SDT is also looking to lift the profile of diamonds by proposing to host an annual Diamond Show on home ground.
Enterprise Development Programme
Aimed at youth empowerment and job creation, the SDT’s Enterprise Development Programme (EDP), initiated in 2015, has successfully trained 27 young participants in diamond cutting and polishing.
The majority of participants from the three-year programme, which is semi-funded by the SDT, some of its clients and the Mining Qualifications Authority, have been absorbed by the industry, with two participants acquiring their beneficiation licences.
According to Mnguni, one of the key successes of the EDP has seen 11 participants trained in India for three months and in Thailand for six months.
As part of contributing towards the growth of the industry, SDT has for seven years with the support of DTI and De Beers taken on average 10 diamond companies to the Hong Kong Gem and Jewellery Show. “Last year at the Hong Kong show, SDT clients sold polished diamonds to the value of around R41-million.”
SDT relocates to the GIDZ
The SDT, together with some role players in the diamond industry, are set to relocate to the Gauteng Industrial Development Zone (GIDZ), situated on the premises of OR Tambo International Airport.
The GIDZ has been set up to cater for the production and export of high-value low-mass goods and focuses on sectors including food processing, jewellery, diamond beneficiation and fuel cells.
“We will be relocating to the GIDZ around November this year – the move will allow us to take advantage of the opportunities presented, including incentives on TAX and VAT – a boon given to onsite producers,” says Mnguni.
The intentions are to set up an Incubation Hub for diamond and jewellery manufacturers and offer start-ups access to machinery equipped with the latest technology. A feasibility study for the Post Incubation Hub is under way.
“Given that machinery and equipment is hugely expensive, the intention is to equip the Hub with cutting-edge equipment and technology for use.”
Mnguni adds that the period for an entrepreneur is five years, after which they are expected to branch out on their own and allow the next set of entrepreneurs to take their place as start-ups.
To ensure that the GIDZ develops into a vibrant and growing economy, the SDT is encouraging jewellery and watch manufacturers to relocate to the GIDZ to have better access to the international market.
“Through the implementation of these new initiatives, we hope to meet our mandate of creating opportunities for employment, especially youth employment.”