Diamond Buyers Club

Lack of exploration, mine closures and job losses in rural areas inevitable if MCIII is applied to junior miners

Mining Charter III (MCIII) heaps more pain on South Africa’s alluvial diamond producers who already face enormous cost burdens and high risks. This previously productive and successful small or junior diamond mining industry consists of just 180 remaining entrepreneurial mining operators employing around 5000 people at an annual salary bill of R550million. It is the primary employer in remote rural areas in which alluvial diamond mining is conducted, and where existing unemployment levels are estimated to be as high as 80%.

MCIII fails to acknowledge that South Africa’s mining sector is not a homogenous grouping of only large mining conglomerates but made up of players of all sizes from Junior miners to large multinational and publicly-owned operations

The alluvial diamond mining industry has experienced steady decline since 2004 when the Mineral and Petroleum Resources Development Act (MPRDA) was implemented. At the time of the implementation of the MRDPA, there were 2000 diamond miners employing some 25 000 people. Today that figure has plummeted to 180 small mining operators and a massacre of employment numbers to around 5 000. Since 2013, there has also been a 61% decrease in prospecting right applications in the Northern Cape 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 ill-considered policy.

MCIII – which currently makes no distinction between the inherent structural and funding differences between Junior miners versus large publicly listed mining companies – will precipitate further drastic decline of South Africa’s...

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