OWN CORRESPONDENT, Johannesburg | Tuesday 7.30am
A GOVERNMENT-appointed team investigating the South African diamond industry urged Monday a thorough overhaul of the country’s diamond controls and its gem valuating system.
A report released here by a task team appointed by the Cabinet earlier this year also called for a review of the composition, role and funding of South Africa’s statutory Diamond Board.
The task team, comprising officials from the department of minerals and energy and the Diamond Board, was appointed to investigate the country’s lucrative diamond industry, which is dominated by the giant De Beers company. The release of the report follows feuding between De Beers and the government diamond valuator over gems the company has stockpiled in London, and others it wanted to export from South Africa.
The report said total revenue collected by the state through income tax from diamond mines, royalty payments, and export duty on the gems had amounted to only 5,8% of total diamond sales over the past 17 years. This “may not represent a sufficient compensation” for one of the country’s most important resources, the report said.
It says the general feeling among local producers and cutters is that the market system of De Beers’ Central Selling Organisation (CSO), which processes 94% of South Africa’s diamond output, is in the interest of international price stability.
However, dealers and cutters complained about the lack of availability of diamonds, and these complaints needed investigation. The number of carats cut in South Africa has declined from 1,5-million in 1989 to 261252 in 1998.– AFP