Diamond beneficiation, whereby stones mined in South Africa are also cut and polished in the country, will be enforced, Minerals and Energy Minister Buyelwa Sonjica said on Friday.
Speaking at the announcement of the new Minerals and Mining Development Board in Pretoria, Sonjica said she was seriously concerned about De Beers’ director Jonathan Oppenheimer’s comments on the costs of beneficiation earlier this week.
”One moment De Beers commits to beneficiation in this country, next moment they are sending this message. Beneficiation is going to be law in this country,” she said, according to a statement from her department.
South Africa’s attempts to boost a local diamond-beneficiation industry would not work unless there was a sufficient subsidy to compensate for the higher costs involved, Oppenheimer reportedly said.
He said polishing costs in sub-Saharan Africa were $70 to $100 a carat compared with $6 to $8 a carat in India, a country with roughly one million people in the industry.
”Unless the government is determined to subsidise that difference, the net benefit of selling those diamonds locally has to be measured against the net loss,” Oppenheimer was quoted by the Business Day newspaper as saying at the Gibs business school in Johannesburg on Wednesday.
”We thought that our relationship was open enough for them to approach us if they had these concerns about beneficiation,” Sonjica said.
She said she was disappointed at Oppenheimer’s comments because De Beers was widely seen as pioneers of beneficiation in South Africa.
She added that the government would not backtrack on its commitment to promote beneficiation as it played an important role in government’s efforts to create jobs. — Sapa