Equal treatment will be our death - alluvial diamond miners' plea to Gwede Mantashe

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  • In December, alluvial diamond producers wrote to the Mineral Resources and Energy Minister Gwede Mantashe, calling for growth-stimulating policy adjustments to support emerging alluvial diamond miners.
  • Mantashe is yet to respond to the issue raised by a body which represents 130 junior diamond miners.
  • Industry representatives say without conducive policy framework, the sector faces a slow death.

SA alluvial diamond miners want government to support them and help "level" the playing field, instead of applying a blanket approach to minerals policy. 

As one of the countries in Africa with alluvial diamond deposits, South Africa, has potential in the industry that entrepreneurs believe remains largely untapped due to a rigid policy framework and lack of investment. 

Unlike deep-level conventional mining, alluvial diamonds are extracted from deposits of sand, gravel and clay. They are commonly found in Namaqualand, the North West and the northern parts of the Free State, with miners ranging from artisanal, small-scale and junior miners.

The operators - through the SA Diamond Producers' Organisation (SADPO), which represents 130 junior diamond producers - in December wrote to Mineral Resources and Energy Minister Gwede Mantashe, calling for growth stimulating policy adjustments to support entrants to the sector. 

From funding to the issuing of prospecting to mining permits, which could take more than a year to process, alluvial miners are aggrieved by what they say is a cumbersome blanket approach in current minerals policy, which has proven to be restrictive to the growth of companies.

"It is not that we are asking to be treated differently, but we are appealing for government support and a level playing field," said mining entrepreneur Amo Marengwa, who is a member of SADPO.

Marengwa, who is based in the North West town of Lichteburg, says alluvial diamond miners are struggling to attract investment, due to lack of incentives for investors linked to policies that "do not create a conducive environment for small players".

"We are governed by the same policy and regulations that are designed for bigger companies ... even access to funding is close to impossible," Marengwa told Fin24.

SADPO's proposal on the Artisanal and Small-scale Diamond Mining policy framework is that it should be commodity-specific, based on the fact that diamonds are the only mineral to have a separate act, and that a "one-size-fits-all" approach might lead to failure.

Slow death

The body also calls for the creation of a small miners development fund to drive transformation, job creation, greater access to information and technical assistance from the Council of Geoscience and Mintek.

"What the government is doing is similar to cutting the wings of a bird and still expect it to fly," said Marengwa.

While diamond mining in the country and the southern African region is dominated by De Beers, with a history dating centuries, alluvial miners do not mine a single site for a prolonged period of time, as move from place to place. Mining operations relocated least once every 15 months, according to the industry body.

Mantashe's department is yet to respond to SADPO proposition, and in the meantime business owners like Marengwa whose operations provide jobs to communities where employment opportunities are scarce.

The sector further proposes that diamonds recovered from prospecting operations should be exempt from the 15% beneficiation requirement to export without paying the 5% export levy as these operations are generally small and cannot afford to beneficiate 15% of small samples or run the risk of not recovering the 5 % export duty. 

"Without conducive policy framework, our sector is facing a slow death," he said.

According to the World Diamond Council, alluvial diamond deposits are found on the Atlantic coast of South Africa and Namibia, and in riverbeds in Angola, Sierra Leone, Democratic Republic of Congo, Central African Republic, Ivory Coast, Guinea, Ghana, Liberia, Tanzania, Togo, Brazil, and Venezuela.

They are swept by winds, rain, and water currents from their primary deposits in kimberlite pipes and miners build walls or divert rivers to expose the diamond-bearing deposits. Artisanal miners often sift through the sand and dig manually to reach deposits.

Of the seven million carats of diamonds mined in South Africa annually, between 2% to 4% comes from alluvial producers, according SADPO.

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