ANC’s destruction of diamond beneficiation almost complete

30 September 2015

The DA is appalled by the news that the last, biggest diamond cutting and polishing company in South Africa is closing. An industry that was previously a significant employer of South Africans has now near-vanished, taking with it numerous job opportunities.

Zlotowski’s Diamond Cutting Works, which operated primarily in Newcastle in KZN, is stopping operations with the loss of some 110 cutting and polishing and more than 60 other jobs. The company is a subsidiary of the giant Hong Kong-based firm Chow Tai Fook, one of the world’s largest, listed jewelry companies.

The closure is the latest chapter in the catastrophe visited on the South African cutting and polishing industry since the ANC ignored industry advice and passed the Diamond Second Amendment Act in 2007. The number of cutters and polishers in the country used to total about 4,500. With the closure of Zlotowski, only about 200 remain.

Sources in the industry cite the same reasons every time: High labour costs and bad legislation, badly implemented.

South Africa’s diamond legislation and regulation need to be completely overhauled. We need to follow the examples of countries like India and the Netherlands where the regulators operate closely with the industry.

The South African industry has been strangled by red tape and is run by people with little knowledge of the industry. The SA Diamond the Precious Metals Regulator currently does not have a single representative of the beneficiation part of the industry on its board.

The ANC paints beneficiation as its next step forward for the mining industry, and plans close government involvement with achieving it. Its destruction of 95% of the diamond cutting and polishing industry shows, once again, that governments cannot micromanage businesses and should not try.

Statement issued by James Lorimer, DA shadow minister of mineral resources, 30 September 2015