Modern Mining January 2023

Gross Domestic Product. Although South Africa is not a ‘primary’ consumer of

polished diamonds, man ufacturers are working hard to ensure that the

industry is marketed l oca l l y, espec i a l l y through social media. As a result, consumers are becoming aware of the existence of the Diamond and Diamond Jewel lery sector in the country and consumer per ception is shifting. Initiatives such as the Enterprise Development Programme faci l i tated by the State

The industry began the final quarter of 2022 avoiding inventory build-up and trading to fill specific orders from consumers.

Diamond Trader have been another important func tion seeking to reduce the challenge of barrier to entry. The programme intends to introduce young South Africans to the diamond beneficiation industry. This industry is capital intensive, and the chal lenges faced by both small-scale miners and diamond processers in Africa are funding, technol ogy, and access to sustainable markets. Another challenging factor is that the diamond business is largely generationally based, which becomes a competitive advantage for those whose busi nesses have been in existence for several years. For instance, most South African owned compa nies are owned by first generation owners whereas their competitors are, in some cases, owned by the tenth generation. This becomes a strength to one and weakness to the other. Nonetheless, the pro gression of the industry is promising and with the attraction of good business management, trans parency and authenticity, it will continue reaching greater heights. 

Rough diamond prices remained stable in 2022.

depth of influence of the sanctions against Russia and Ukraine has not been fully felt in the market and its understanding is crucial going into 2023. Currently, the trade is optimistic with expectations that the holiday season will result in a good trade. In addition, the Chinese New Year, Valentine’s Day, and the March Hong Kong Gem and Jewellery Shows are activities that usually suggest market direction in the new year. The Far East trade is expected to continue improving as the economy opens with the lifting of Covid 19 restrictions. The trade further hopes that important trade shows, such as the JCK Las Vegas and the Hong Kong Gem & Jewellery Show, will facil itate a return to normality and thus provide a feel for the market direction. Nonetheless, the market is expected to continue being under pressure with prices of rough remain ing high due to scarcity and polish not yielding the same. The diamond trade is a unique industry, pur chasers need to be prepared to pay a good premium to win goods and be able to defend their premium at the sales point. Consequently, buyers are expected to continue exercising cautions and trade to fulfil orders. No buyer will want to purchase unnecessary inventory, unless permitted by the market direction. Africa and the South African impact on the diamond industry The African continent remains a critical player in the global diamond industry, especially in rough diamond production. According to the Kimberley Process Cer t i f icate Scheme Annual Global Summary: 2021 Production, “African rough diamond production was estimated to be 53% by volume and 70% by value towards the global production. These statistics further outline that South Africa is listed among the top 5 rough diamond producers in the world”. There is no doubt that the South African diamond industry is a contributor to the country’s

South Africa is listed among the top 5 rough diamond producers in the world.

January 2023  MODERN MINING  19