Mlambo-Ngcuka orders investigation into controversial price of piece sold to her by diamond dealer
Mungo Soggot
The Minister of Minerals and Energy Phumzile Mlambo-Ngcuka has moved to defuse allegations of impropriety over her receipt of a tiara from an influential diamond dealer by donating the piece to an education project.
Mlambo-Ngcuka called this week for the Public Protector to investigate the transaction and for an independent diamond valuator to determine how much the piece is worth.
But she says she will donate the traditional tiara, or isicholo, to an Afrocentric jewellery education project irrespective of the outcome of these probes “in order to put an end to the controversy”.
The Mail & Guardian reported last week that Mlambo-Ngcuka had bought the tiara at a heavily discounted price from Macdonald Temane, a member of the South African Diamond Board, which regulates the industry. Temane is also a De Beers sightholder, which means he is a privileged client of the diamond company.
Before the minister’s announcement this week of her corrective action, both her office and Temane scrambled for explanations to justify the piece’s low R6 000 price tag. Diamond experts familiar with the piece say the material alone the gold and diamonds excluding any labour costs is worth many times that amount. Together, Temane and the ministry offered four different accounts of what diamonds had been used, with none of the accounts matching the version offered by several diamond industry sources familiar with the piece.
In a statement released as the M&G was going to press last week, the ministry said that according to Temane the diamonds used in the tiara were “+/-0.15 points, I-j colour, I1-I3 purity, princess cut”, adding that the gems were “flawed”. The previous day, Temane had been vague about the type of diamonds used, initially saying the piece contained “12 10-pointers”, and then “16 five-pointers”. He then said that larger stones had been used, but that they were flawed. A carat consists of 100 points, while diamonds are also costed according to their colour and cut.
Diamond dealers in Antwerp and South Africa said the kinds of diamonds specified in the press release, which are unusual for a princess cut, would normally go at wholesale for about $200 a carat for this quality. However, local diamond industry sources said about 40 stones which were comfortably larger than 15 points had been used which would be worth several times more. The gold used in the tiara is estimated to be worth at least R20 000.
In the press release, the ministry also suggested there was no conflict of interest in the minister dealing with Temane as the diamond board is soon to be dissolved, and its functions absorbed into the Department of Minerals and Energy.
However, the diamond board will remain active for the foreseeable future and a new board has in fact just been reappointed. The names, which have not officially been released, include Temane, other De Beers sightholders, and, as is the custom, other diamond industry, police and government representatives.
The list excludes Louise Tager, the former Transnet chair, who has fallen from grace with the government following the debacle surrounding former South African Airways boss Coleman Andrews. Tager, like Temane, has shot to prominence in the diamond industry in recent years, despite the fact she has no background or expertise in the industry. Tager became a sightholder for a diamond company run by top international diamond dealer Benni Steinmetz, who is close to De Beers. Abbey Chikane will remain the board’s chair.
The diamond board’s main role is to value and regulate diamonds earmarked for export. It operates under the Diamond Act, which is supposed to help encourage a local cutting industry, and restrict the export of diamonds. Many local players complain that in practice this has not happened, and have raised concerns about the dominance De Beers exercises at the board. De Beers’s base is London, where it has concentrated and developed its power by using its monopoly position to set diamond prices. The more diamonds De Beers gets to London, the stronger that position.
Mlambo-Ngcuka said she ordered the tiara as part of a drive to promote local jewellery design, and subsequently wore the item at several events. She said she had told Temane to stick within a R5 000 budget, but had then agreed to pay R6 000. She said she wanted Temane to work with women of the Ziyabuya Emasisweni Craft Project under the Kgabane Jewellery Pilot project. Her office said the Kgabane project, or a similar Afrocentric jewellery scheme, would get the tiara.
The minister’s office said another reason she had decided to give up the tiara was that in the light of all the publicity it now posed a security risk.