diamond licence talks lighten dealer concerns 
23 July 2008

The anxieties of diamond dealers and cutters about the implementation of new legislation on issuing licences have been allayed after negotiations between the regulators and the Diamond Council, council chairman Ernest Blom said.

Under the Diamond Amendment Act and the Precious Metals Act, both promulgated 18 months ago, a new process of applying for licences was introduced. Diamond licences expired on June 30 this year and precious metals licences, which refer to the broader industry upstream of diamond cutting and dealing, will expire on the same date next year.  A mid-June article in influential diamond industry publication Tacy highlighted the strong emotions expressed in the local industry over the insistence by the Diamond and Precious Metals Regulator that the Mining Charter had to be complied with by all diamond businesses applying for new licences.

Tacy quoted Martin Mononela, an official in the regulator’s office, telling the industry that: “Every one-man, white-owned diamond dealership or manufacturing unit (in SA ) must have a black equity partner, otherwise they will not be allowed to operate any more beyond July 1, 2008.”

Tacy said SA’s diamond policies had contributed to the growth of Botswana’s diamond industry, with employment in SA’s diamond-cutting industry dropping to 1500 from 2500 in the past year while employment in Botswana’s diamond cutting industry had risen to 2800 from 800 in the same period.  In June, Paul Meyer, a 25-year-old sole proprietor of a diamond dealing business, secured a court order requiring the regulator’s office to accept his application for a new licence.

In the affidavit attached to his application for a court order, he said the official in the regulator’s office “immediately informed me he would not accept my application … as I had not complied with the Mining Charter and had not made provision for any form of black economic empowerment in my business plan”.  Webber Wentzel partner Peter Leon said under the Diamond Amendment Act the regulator may have regard to the Mining Charter but had no right to apply it “holus bolus” to the industry. The regulator was acting beyond its powers. The Mining Charter was not designed for the downstream industry, which should get its own charter, Leon said.  But Blom said concern about the issue of new licences had been resolved, with the regulator “bending over backwards” to help with applications.

“There was an issue over interpretation of the regulations, but after negotiations between the council and the regulator we have found common ground, where the licence applications are now being accepted,” he said.  Each case would be decided on its merits, he said. It had also been agreed that diamond businesses would not have to close on June 30 if they did not have their new licences, but could continue trading until their applications had been approved or rejected.  Diamond and precious metals regulator CEO Louis Selekane had not responded to e-mailed questions by deadline yesterday.

Charlotte Mathews,   www.businessday.co.za