Why should jewelers care about South Africa? After all, many of the world’s diamonds are mined in other places now and sold and controlled by groups other than South Africa’s most famous diamond mining group, De Beers. I asked myself that question recently as I prepared for my first trip to southern Africa, on a press tour hosted by De Beers. Would anything I learned help you to sell more diamonds?
The answer is yes! We visited sites in South Africa as well as in Namibia and Botswana, two countries with equal partnership contracts with De Beers for the diamonds mined there.
The sophistication with which diamonds are mined today is a great story to tell your diamond jewelry consumers. It’s a high-cost, high-risk, huge-upfront-investment business that will make a fascinating commentary to pass on when consumers ask why diamonds cost so much. You can easily illustrate the reasons for diamonds’ priciness by the work and research at the mines. In the coming months, JCK will lay it out for you in simple terms so you can share with your customers the great photos and facts Senior Editor Russ Shor and I obtained on our travels.
Aside from the mining story, South Africa continues to fascinate anyone who cares about social change, black empowerment, the future of southern Africa and how these issues affect the ability of De Beers and other mining concerns to wrest diamonds and gold from the earth. I finally understand what Alan Paton was talking about when he wrote Cry, the Beloved Country, a 1948 novel about love, death and forgiveness among blacks and whites in that infamous land. It’s a country that gets under your skin and affects you emotionally and powerfully. Not to make a pun, but it’s true that nothing is black and white in South Africa. If you’re uncomfortable understanding and accepting shades of gray, you’ll have a tough time sorting out the country’s tangled political legacies.
It’s fascinating to watch how the South African black majority deals with its opportunities as well as its problems. Its opportunities are legion and, for brevity’s sake, I’ll just mention a few of the economic ones that will most affect the mining of diamonds and gold. Many opportunities involve De Beers and its major associate, Anglo American, since they are such dominant forces on the country’s business scene.
Back in the days when apartheid was at its peak and Harry Oppenheimer was the chairman of De Beers and Anglo American, many critics said large business groups such as his weren’t doing enough to press for an end to the apartheid system, even though Oppenheimer was a member of and a major financial backer of the South African Liberal Party, which opposed apartheid. But Oppenheimer points out, in a newly published book about the end of apartheid, that business did the most good by staying healthy during those dark years, building a modern economy from which black empowerment could draw sustenance. He told Financial Times journalist Patty Waldmeir, author of Anatomy of a Miracle (W.W. Norton, New York, 1997), that building strong businesses, while putting an economic spin on the moral issues, was the best route companies could take. “Many of us quite consciously put moral arguments in economic terms because we thought this was the way to make people listen.” Whether or not you agree with Oppenheimer, Waldmeir argues persuasively that it was the economic cost of apartheid – that businesses and the economy were destined to fail without an educated, skilled black work force to sustain them – that doomed it more than its repellent immorality.
Events during the past year seem to bear out Oppenheimer’s comments about his group’s remaining healthy enough to meaningfully contribute to real black empowerment. Anglo American has sold significant holdings to two black economic consortiums, both headed by men who had close ties to black politics during the final years of apartheid: Cyril Ramaphosa and Mzi Khumalo. De Beers also has sold 44 mineral rights holdings in South Africa to small-scale miners, many of whom came out of disadvantaged black communities and have formed successful black empowerment groups.
For the future of South Africa and the healthy growth of its mining industries, such news is a welcome change from the doom and gloom that for so long emanated from the beloved country.