Scheme to help SA's gold jewellery industry
Minerals and Energy Minister Lindiwe Hendricks has launched a R106-million scheme to help the gold manufacturing jewellery industry in South Africa.
Aimed at reducing “the current high cost of financing gold working capital” in South Africa, the scheme is part of the offsets of the Hawk and Gripen fighter aircraft component of South Africa’s controversial arms deal.
With South Africa producing 14% of the world’s gold, it was a shame only four percent of the country’s gold was beneficiated locally, Hendricks said in Germiston, on the East Rand, on Thursday.
“A number of reasons exist for this situation, which include the higher cost and the risks that our local manufacturers face as well as the lack of a scheme similar to the one being launched today [Thursday].
“We therefore hope that this initiative will facilitate an increase in output of the SA gold jewellery manufacturing sector, and improve their ability to compete on an equal footing with other international jewellery manufacturing economies,” she said.
The absence of a “significant or large skills base of employees who would, over time, be able to pose their own enterprises” was another challenge to the industry.
“Such a challenge can be overcome through concerted efforts of existing players in the sector to train new entrants ...,” said Hendricks.
She said the initiative was in line with government’s policies on beneficiation.
“If successful, [it] will have a favourable impact on growth of the gold beneficiation sector and job creation.”
Defence companies SAAB and BAE Systems, which benefited from the arms deal, and gold mining companies AngloGold Ashanti and Gold Fields created the scheme after lengthy talks.
The four companies have collectively extended guarantees of about R70-million at the current exchange rate to Standard Bank to underwrite the scheme.
Speaking at the event, David Munro, the bank’s chief executive, said: “Not only will the scheme create and sustain vital jobs in the gold sector, but it will also reduce the current high cost of financing gold working capital to South African jewellery manufacturers.
“As scheme manager, Standard Bank will administer the process of making secured gold advances to qualified jewellers,” he said. - Sapa.