DE BEERS, the world’s largest diamond producer by value, has selected five black-owned cutting and polishing companies for special attention towards meeting the South African government’s demands for beneficiation of the country’s mineral wealth.
Unveiling the scheme on Wednesday, Mpumi Zikalala, a director of De Beers Consolidated Mines – the South African division of De Beers – said the companies would receive assistance and “bespoke” rough diamond supplies to ensure they could compete locally and overseas.
De Beers, which is 85% owned by Anglo American, will provide technical and production support in all aspects of the business, from rough diamond purchases, to manufacturing, marketing and distribution.
It will also facilitate access to funding through Anglo’s Zimele small business development programme and from De Beers’ clients, called sightholders.
As part of the programme, the five cutting and polishing businesses will receive entrepreneurial guidance from Raizcorp, a business incubator specialist.
The five companies are Kwame Diamonds, Nungu Diamonds, Thoko’s Diamonds, Diamonds Africa and Molefi Letsiki Diamond Holdings.
The bespoke diamond supply will be in addition to rough diamond purchases. These companies can ultimately apply to become sightholders, which are the more than 80 handpicked clients that buy De Beers’ diamonds.
The intention of the programme was to “increase the cutting and polishing of rough diamonds “in line with the South African government’s beneficiation strategy” and accelerating the transformation of the local cutting and polishing industry De Beers said.
Bruce Cleaver, the incoming CEO of De Beers, said the number of South African cutting and polishers had shrunk to just 400 from a peak of 5,000 as cheaper, more competitive countries like India dominated the finished diamond market.
De Beers said it already supplied 40% of its local diamond supply for cutting and polishing in SA. It produces about 930,000 carats each year from its Venetia and Voorspoed mines in SA.