THE TEAM

· Department of Minerals and Energy

· South African Diamond Board

· Mintek

THE DIAMOND AMENDMENT BILL

• Rationale for amending the law

• Objects of the Bill

• Diamond Amendment Bill

• Section 75 Bill

• Section 76 Bill

• Money Bill

• Issues Raised during Public Hearings

• Conclusion

Rationale for amending the Law

· Increase access to rough diamonds for manufacturing

· Grow beneficiation industry in SA to create jobs

· Increase participation throughout the value chain

· Make SA a major international diamond beneficiation centre

Objects of the Bill

Establish the South African Diamond and Precious Metals Regulator

· Empower the Regulator to establish a Diamond Exchange and Export Centre

· Establish the State Diamond Trader

· Review types of Licences

• Require diamond producers to offer a portion of all diamonds produced for purchase by the State Diamond Trader

· Require that unpolished diamonds intended for export must first be offered at the Diamond Exchange and Export Centre

Provide for disclosure of enhanced diamonds & synthetic diamonds

· Provide for the implementation of Broad Based Socio-Economic Empowerment

• Replaces the current South African Diamond Board and will also assume the regulation of precious metals

• Functions:

- Implement, administer and control the purchase, sale, beneficiation, import and export of diamonds

- Appoint a Government Diamond valuator

- Establish the Diamond Exchange and Export centre

- Ensure compliance with the BBSEE charter

• Governed by a representative Board

• Funded through appropriation by Parliament & other sources

• Established to promote:

- equitable access to unpolished diamonds

- local beneficiation of SA's unpolished diamonds

• Functions:

- Purchase a portion of unpolished diamonds based on local requirements

- Sell to local beneficiators

- Promote the industry

• Governed by an independent & representative Board

Diamond Exchange and Export Centre

• Unpolished diamonds intended for exports offered at the centre

• Export facility for diamonds set in jewellery or tools

• Registration of exports and imports

• Intensify regulation of exports for unpolished diamonds

Licences and Permits

· Transitional period will be one year

· Transfer of SADB employees, assets, rights, liabilities and obligations to the Regulator

· Processing of pending applications

· Re-application by current permit/licence holders

Issues Raised during Public Hearings

· Diamond and Precious Metals Regulator Board

- Board representation increased from 13 tol6

- Board now fully representative

- Funding of the Regulator

· State Diamond Trader (SDT)

• "Cherry picking"
• Will it export rough diamonds?

- DeBeers offer of DIAMDEL

- Funding of the SDT

- SDT might have an "African" aggregate

Issues Raised during Public Hearings.

· Synthetic & Enhanced diamonds

- Must be declared

-The SA Diamond Board investing in latest equipment to ensure compliance on synthetics

· What caused the market failure and sustainability of the supply of rough

- Largely by lack of access to rough (most of SA product exported)

Conclusion

· Equitable access to rough

· Maximise value addition

· Separate regulatory function from the promotion function