ABN AMRO Bank offers South Africa help with beneficiation

ABN AMRO Bank, which services about a quarter of the world diamond industry�s debt, has offered the South African government advice and help with strengthening its diamond polishing industry, reports Loet Kniphorst, global head of the bank�s International Diamond and Jewelry Group. However, both Kniphorst and De Beers Chairman Nicky Oppenheimer warn that �beneficiation� won�t be easy.

Oppenheimer said it costs $60 to $80 per carat to polish diamonds in South Africa, compared to $15 to $20 per carat in India. Thus, despite the fact that $600 million a year worth of diamonds are beneficiated in South Africa, only about 2,400 people are employed in diamond polishing in South Africa now, compared to 8,000 in the 1980s.
Oppenheimer said there is room for creativity, such as creating a domestic market for South African-made diamond jewelry and boosting the domestic diamond jewelry manufacturing industry.

The South African government is finalizing more coercive measures, such as a 15% export tariff on rough diamonds on top of an 8% levy, and the establishment of a State Diamond Trader and a Diamond Exchange and Export Control body that will ensure that local polishers get first dibs on South African-mined stones. Kniphorst said the government needs to be careful with such measures or it could harm the industry.