The sparkle is fading fast for SA’S diamond industry

Sale of centre in downtown Joburg comes as latest blow

THE IMMINENT sale of the Diamond Centre in central Joburg is the latest blow to the local diamond cutting and polishing industry which has lost market share to Israel and India in recent years.

A small group that calls itself the Diamond Consortium last week said it planned to lobby the government to oppose the sale of the building citing lack of consultation.

The consortium’s chairperson Ernest Malakoane said the building, which was being sold for R350 million to make way for the construction of an apartment block, was a onestop shop for manufacturers and traders in the diamond industry.

He said the sale would have far-reaching implications for small businesses as it would leave them out of the diamond trade value chain.

Sabotage

“The sale of the Diamond Centre is a sabotage to our small industry. The government should stand up,” said Malakoane, adding that the consortium wanted Redefine Properties, the building’s landlord, to state in writing why the building should be sold.

Malakoane said the small companies would have nowhere to go after the sale. He said the consortium had reached out to Deputy President Cyril Ramaphosa and the Department of Mineral Resources to intervene.

“Members of the consortium were never consulted on the sale of the building. The only companies that were notified were those that could afford to rent in Rosebank, Botswana and Bedfordview, and they relocated to the suggested locations,” he said.

However, a Redefine Properties spokesperson who did not want to be named said the company remained committed to its strategy of recycling capital through disposing non-core assets.

The spokesperson said the assets no longer met Redefine’s investment criteria.

“The Diamond Centre is one of the properties that has been identified for sale consistent with our investment strategy,” she said.

‘The decision to sell is sabotage to our small industry… the government should stand up.’

“A conditional sale agreement has been concluded subject to receipt of Competition Commission approval.”

But Malakoane said without the Diamond Centre precinct, the industry was dead.

“The industry is finished,” he said. “We used to have bus loads of Chinese tourists coming here but we have none coming here now,” Malakoane added.

He said the consortium had complained about access to funding and rough diamonds and the shortage of jobs.

Malakoane said the body also objected to the training of students in diamond polishing because there were no jobs, access to funds and rough diamonds.

“The students are trained time and time again but there is no access to rough supplies.

“Dealers from other countries, including India and China, receive financial support from their governments to purchase diamonds in South Africa, while South African benefactors and diamond dealers have no access to rough diamonds due to availability and funding,” Malakoane said.

“There are more than 250 students being trained every year on a Mining Qualification Authority programme. However, there is no placement after completing the course as they could be employed by small companies only if they had access to a rough diamond supply,” he stressed.

Malakoane blamed the state diamond trader for not supplying rough diamonds to small players.

“The state diamond trader is operating on a monopoly basis and staff cannot assist us as they have no interest and knowledge of the diamond industry,” he added.