The South Africa national assembly approved controversial changes to diamond laws, allowing for the country to get a larger part of the overall diamond business, Reuters reports.
The law aims to stimulate more jewelry manufacturing and gem cutting, especially by black South Africans. Mining companies, led by De Beers, have opposed the changes, saying it will harm the industry and lead to mining closures and job losses.
The company’s biggest shareholder, Anglo American, has reportedly said the proposed law might lead to the demise of the Diamond Trading Company.
The new law will compel miners to first offer their diamonds to a state trader, which will make stones available to local cutters and polishers, Reuters reports. It compels producers to route their exports through a state-controlled export center, although the minister can issue an exemption from this.
A proposed levy will be charged on exports and will be set by a parallel finance law following negotiations between the National Treasury and an industry already facing an 8 percent royalty on total diamond sales, Reuters reports.
South Africa Minerals minister Lindiwe Hendricks reportedly dismissed warnings of massive job losses because of the law, saying a number of major companies had expressed interest in investing in South Africa’s processing sector once it was passed.
“Some of the concerns raised were valid whilst others were nothing but myths that were created by people who do not want to see the status quo changed,” Hendricks reportedly said.
She added that diamonds could still be mixed in Botswana—in line with a request from that country’s president Festus Mogae last week—as groups could be exempt from first offering their diamonds to the state trader, Reuters reports.
The bill will now be referred to parliament’s lower house and will be implemented once the finance law is approved, likely early next year, Reuters reports.
Lawmakers also approved the Precious Metals Bill, which also aims to encourage local processing and requires companies to apply for refining and processing licenses and keep records of all products received and sold, Reuters reports.Follow JCK on Instagram: @jckmagazine
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