We used to have tourists from China and India, but their number fell sharply

The diamond sector of South Africa is shrinking to dangerous levels, and the government is doing nothing to revitalize it.

Zlotowski's Diamond Cutting Works, South Africa's largest cutting and polishing company, recently announced that it intends to close its businesses.

The company worked mainly in Johannesburg, and other branches worked in Newcastle in the province of KwaZulu-Natal, and it is a subsidiary of the Hong Kong firm Chow Tai Fook, considered the world's giant among registered jewelry companies.

James Lorimer, the minister of the "shadow cabinet" of the Democratic Alliance (DA) for mineral resources, representing his party in the parliamentary Committee for the Supervision of the Mining Industry, called the closure of Zlotowski a "catastrophe."

"Earlier, the number of cutters in the country was about 4,500, but with the closure of Zlotowski there will be only 200," he said, adding that strict legislative requirements and working conditions make the survival of diamond industry participants extremely difficult.
 
Bureaucracy and the government's lack of understanding and desire to work with the industry are absolutely horrifying, "Lorimer said.

The most interesting is that there is not a single representative of the cutting and polishing companies in the South African Diamond & Precious Metals Regulator. "

According to Lorimer, the diamond law, which states that South African diamond mines should provide 10% of their production to local beneficiary companies, "almost completely destroyed" the beneficiation of diamonds.

Ernie Blom, president of the World Federation of Diamond Bourses and chairman of the Diamond Dealers Club of South Africa, told Miningmx that there are several factors that led to a reduction in the diamond industry in South Africa.

"There is no longer a permanent supply of diamonds, as De Beers sold most of its South African businesses," he said. "Instead, diamonds are sold on tenders, and companies like Zlotowski do not have reliable supplies."

Blom also spoke about the high cost per carat in South Africa in comparison with countries such as India and China, as a factor in restraining growth. "We are losing market share because of the high cost of cutting because of the high cost of labor and low productivity."

Blom said that high export costs are also a heavy burden for the industry. "Our cutters want to export to the rest of Africa, but the costs are so high and so restrained that countries such as Botswana, Namibia and Zambia who want to buy them from us are forced to turn to other countries."

Consequently, the government's policy of beneficiation hinders the ability of major South African players to trade, but Blom believes that the diamond tourism industry has faced stricter visa conditions.

"We used to have tourists from China and India, but their number fell sharply.

This will lead to the further closure of diamond cutting companies, which, in particular, dealt with the sale to tourists. I wrote to the minister, but nothing has been done so far. "

Susan Shabangu, the former minister for the mining industry, said in her previous budget statement that the Department for Natural Resources was aware that the legislation was holding back the industry and said that its department was going to address the issue of improving legislation.
http://www.miningmx.com/page/news/diamonds/1654691-SA-diamond-sector-dying-on-the-vine#.Vhfme3rtlHw