The plight of the of the small and junior diamond mining sector in the remote and economically depressed areas of the Northern Cape Province (NCP), including the West Coast, and North West Province (NWP) has come to the fore in a study done by Sinazo Dlakavu (MSc) during the period 2018 – 2020.
The South African Diamond Producers Organisation (SADPO) points out that this sector has been under severe pressure over the past 17 years and that the number of producers has decreased by almost 90%, with employment figures plummeting by around 80% (20 000 jobs).
The study conducted by AEON under the auspices of the Nelson Mandela University, titled Status of the South African Small and Junior Mining Diamond Sector, has revealed a steady decline in the number of mining companies and production since 2004 when the Mineral and Petroleum Resources Development Act (MPRDA) was implemented and the sector continues to experience on-going challenges [listed in the report], which are now exacerbated by the current Covid-19 pandemic and its impact. Per SADPO, these findings offer a picture in stark contrast to that of the previously productive and successful Small and Junior diamond mining industry in the area, which is dominated by alluvial diamond miners, and a few remaining small kimberlite operations.
SADPO points to the requirement “for an immediate review of the existing disabling mineral and mining policy frameworks that apply to this sector. Unless far reaching changes and enabling and sustaining mineral policy interventions are implemented as soon as possible, the Small and Junior diamond mining and development sector will contract further, with further negative consequences for employment and job creation in the depressed NCP (including the West Coast), NWP and elsewhere in South Africa.” The report highlights that in 2004 approximately 2 000 diamond miners employed some 25 000 people. These numbers have fallen dramatically, and today only 220 Small and Junior mining operators employ a projected 5 720 people.
Key findings of the report were that “about 85% of the entire industry disappeared! Since 2013, there also appears to have been about a 61% decrease in prospecting right applications in the NCP where the bulk of alluvial diamond mining takes place – largely the ambit of entrepreneurs, local private operators, and farmers. Like many other mining sectors, the diamond mining sector is also seeing rapid growth of illegal operations. Much of this on the back of poorly considered policy.
“Whereas the sector previously produced approximately 300 000 carats per year valued at R4.2-billion (USD300-million, at an average price of USD1 000 per carat) with foreign exchange earnings from production estimated at R3.2-billion (SADPO, 2019), the industry faces declining production and revenue trends, and these have been further negatively impacted by the Covid-19 pandemic,” writes SADPO.
Gert Van Niekerk, Chairman of SADPO concludes, “We are delighted that we eventually have accurate figures on the state of the industry to confirm what we have been trying to convey to government for the past 10 years or more. The next challenge is now to convince government to use the facts and figures collected in this independent study as a basis for future regulations and legislation.”