Diamond trader 'is job killer'
September 18, 2008
By Justin Brown
Johannesburg - The introduction of the State Diamond Trader (SDT) had destroyed the local diamond cutting and polishing industry and had resulted in the loss of about 1 500 jobs, the United Diamond Association of SA (Udasa) said yesterday.
Ernest Malakoane, Udasa's chairman, said the introduction eight months ago of the SDT by the department of minerals and energy had resulted in a "crisis" among small diamond cutters and polishers, including its 200 members.
Before the SDT came into being there were 2 500 jobs, but because of retrenchments as a result of a lack of supply from the state trader, only about 1 000 people were left in the sector.
Derek Thema, Udasa's deputy chairman, said Abbey Chikane, the SDT chief executive, had been dismissed. Selloane Motloung, the SDT's company secretary, declined to comment.
Sputnik Ratau, the spokesperson for the minister of minerals and energy, said that if people in the diamond industry had incurred losses, then the department was "open to engagement".
Before the introduction of the SDT, small cutters and polishers used to buy diamonds from De Beers' Diamdel unit. However, Diamdel's role was transferred to the SDT, a move Malakoane called "a disaster".
Malakoane said Udasa had decided this week to prepare a lawsuit against Buyelwa Sonjica, the minister of minerals and energy, and the SDT for losses suffered as a result of the failure to supply the association's members with diamonds.
The claim was expected to run into hundreds of millions of rands.
Malakoane said the Industrial Development Corporation had not provided the diamond trader with funding to buy sufficient gems.
"Since the introduction of the new order, the SDT has been in short supply of gem stones," said Malakoane.
Ratau said the national treasury was taking a relook at the SDT's funding.
The lack of supply from the SDT had resulted in financial losses for diamond cutting and polishing businesses, with some having closed down.
In May Udasa wrote a letter to Sonjica complaining of "chaos at the diamond centre in Johannesburg".
In the letter, Malakoane highlighted "the chaos that has enveloped the [diamond] beneficiation industry since the promulgation of the new Diamond Amendment Act".
In July Udasa complained to Gauteng premier Mbazima Shilowa, who referred the matter to Paul Mashatile, the MEC for economic development.
The local diamond mining industry is required by law to supply the SDT, which began trading in January, with 10 percent of annual production.
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