Charter has ruined sector
While the South African mining industry’s dispute with the Department of Mineral Resources over the third iteration of the Mining Charter has made front-page news over the past eight months, spare a thought for the smaller jewellery and diamond manufacturing industry.
The Mining Charter was imposed on the jewellery and diamond manufacturing industry though the Precious Metals Act and Diamonds Amendment Act.
The industry was not part of the negotiations that led to the Mining Charter in the early 2000s and it was not consulted at any stage over the past 17 years.
In fact, it is quite obvious that it was not the intention to apply the Mining Charter to diamond and precious metal manufacturing, if one reads what needs to be complied with and the blanket exemption the charter granted to mining permit holders — the authorisation issued to smaller mining operations.
Ten years down the line from the initial application of the Mining Charter to the downstream diamond and precious metal manufacturing industry, the destruction it has caused is plain to see.
Prior to 2005 there were about 6,000 diamond and jewellery manufacturing operations and this has dwindled to under 1,000.
This must be seen against the backdrop that it is government policy since 1998 to promote in the country downstream manufacturing of minerals, which is popularly referred to as beneficiation.
Many operations closed down, while small operations stayed small, with the result that there is just a handful of medium and large operations left in this sector.
Moreover, SA’s output of jewellery plummeted from 12 tonnes prior to 2005 to about one tonne in 2017.
From this it can be deduced that the Mining Charter has led to the decline in beneficiation when applied to the downstream diamond and jewellery manufacturing industry.
Now with a new Mining Charter being discussed at high level with the government, the application of the charter to a downstream manufacturing industry should be repealed.
It is the wrong instrument to grow manufacturing and this should have been obvious.
We should not have waited 10 years to realise it.
Jessie Collins Bedfordview