Blom Urges Joint Effort to Mend South Africa Trade

RAPAPORT... World Federation of Diamond Bourses (WFDB)president Ernie Blom has called for the industry and government to collaborateand rebuild South Africa's diamond trade following massivedownsizing of the industry. "The diamond sector worldwide has flourished when close cooperation betweengovernment and industry prevails," Blom said last week, following an address by Gwede Mantashe, the country's minister of mineralresources, at the annual Investing in African Mining Indaba conference. The South African diamond industry has been on a downward spiral, Blom said,noting the number of cutters and polishers had dropped from 4,500 a few yearsago to fewer than 300 in 2019. Some 800 licensed jewelry manufacturers operatein the country today, as opposed to 3,200 in 2008. In an open letter to Mantashe, Blom pointed out that despite the minister'scomments that the red tape associated with processing operating licenses wasthe main obstacle the industry faced, many other issues have impacted thecountry's diamond trade. There are six other major problems, according to Blom. One issue surrounds thecomplex rules associated with beneficiation - a method of adding economic valueto a country through the creation of jobs in other parts of the trade. There isalso a lack of clear communication between the government and industry membersin terms of policy, Blom notes. Additionally, the trade deals with taxstructures that favor importers, meaning that approximately 80% of diamonds andjewelry sold in the country are imported. He also cited overregulation of theindustry, lack of access to necessary funding, and rampant crime, which stopsconsumers from buying jewelry and prevents proprietors from opening new stores. These problems are in direct contrast with international competitors, whosegovernments are working together with the industry, Blom said, pointing toIndia, China, Korea and Israel. "Looking at the road ahead, it is my sincere belief that if the government andthe industry work together to develop a thriving local diamond-and-jewelryplatform, we will not only create employment, but also handsome financialbenefits for South Africa," Blom said. "We have many case studies from aroundthe world that have been implemented abroad, and this could form the basis of abrand-new joint strategy for the local market." The South African Ministry of Mineral Resourceshad not responded to requests for comment from Rapaport News at presstime. Image: WFDB president Ernest Blom. (Laurent Boeki)