Modern Mining May 2023

DIAMONDS

De Beers achieves success with Small Beneficiators Customer project

Following De Beers’ success with its Small Beneficiators Custom er (SBC) pilot programme, which is helping small-scale benefici ates to ensure future sustainability, the diamond producer will officially launch the project in May. By Nelendhre Moodley .

T he company partnered with key industry play ers – The South African Diamond and Precious Metals Regulator, South African Diamond Manufacturers Association, South African Diamond Dealers Club and the State Diamond Trader – to identify players in industry keen to par ticipate in its SBC pilot programme. The project, initiated in early 2022, identified seven businesses in need of assistance in areas including requisite business strategy, networking opportunities, marketing, and access to smaller more affordable parcels of rough diamonds. According to De Beers Beneficiation Manager, Kagiso Fredericks, the pilot project proved to be extremely productive with the miner now rolling it out as a regular programme. “South Africa is a rich source of rough diamonds and, aside from helping to upskill industry, it is impor tant for us as diamond producers to afford small beneficiation customers access to affordable parcels of rough diamonds,” he explains. The small businesses that formed part of the pilot project are D&D Diamonds, House of Phoenix, Luteja Diamond Cutting works, MACS Diamonds, Neluwa Meregi Trading, Net diamonds, and Vivid Gems. Although the miner initially estimated that it would take ten small businesses under its wing, only seven businesses met the prerequisites. “At the onset of the programme, about 20 small

businesses showed interest in participat ing in the pilot project. However, a number of them did not make it through our selec tion criteria, which included compliance to the South African Diamond Act and adhering to the De Beers Group Best Practice Principles.” Research informs SBC programme According to Fredericks, prior to initiating the pro gramme, the diamond miner conducted extensive research to determine the reasons why Small, Medium and Micro Enterprises were not managing sustainable businesses in the diamond cutting and polishing sector. “The research flagged four key aspects that were a challenge for small beneficiation businesses, namely: entrepreneurial ability, access to finance, access to markets and access to rough diamonds in smaller quantities at reasonable prices.” Fredericks says that being equipped with techni cal prowess is not enough to succeed in this sector; businesses need to be able to make opportunities for themselves. Given that South Africa’s diamond industry has a long history of time-honed players equipped with decades of industry knowledge and experience, it is essential that new entrants have the entrepreneurial skills to navigate this sector. “Successfully establishing a cutting and polishing business takes time and it is vital to ensure that SBCs are working with people who have a similar mindset, which is to have a long-term view. De Beers itself celebrates 135 years in business.” The research also found that a key deterrent to potential beneficiates is limited access to funding, which stymies a business’s ability to acquire the req uisite parcels of rough diamonds. De Beers Group sells its rough diamonds through two channels: Global Sightholder Sales and Auctions. Currently, rough diamonds are offered to De Beers International Sightholders – a top tier cus tomer base, that meets the company’s stringent requirements – on a three-year contract. However, the sizes of parcels offered are generally out of

Evaluating a diamond following the cutting process.

Kagiso Fredericks, De Beers Beneficiation Manager.

The cutting and polishing process of a diamond.

12  MODERN MINING  May 2023