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Mining of Diamonds in South Africa Updated Report Available
BY Alex Conradie
South Africa
03 December 2015
R 2 040.00 (ZAR)  
estimated $ 123.61 (USD) *
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The Mining of Diamonds


This report focuses on the diamond industry in South Africa where, according to the Kimberley Process Certification Scheme (KPCS), 7.4 million carats were mined during 2014. Although this means South Africa was the world’s seventh-largest producer in terms of carats, KPCS statistics reveal it was the fifth-largest producer in terms of value. In total 10.4 million carats valued at US$1.7bn were exported in the same year. The domestic sector, which employs more than 13,000 people, is dominated by De Beers’ South African subsidiary, De Beers Consolidated Mines (DBCM). De Beers Sightholder Sales South Africa (DBSSSA) sorts and values DBCM’s rough diamond production and sells more than 40% of it to local diamond cutting factories and the State Diamond Trader during ten diamond sales per annum.


Falling Diamond Prices


As with all mining sectors, the challenges faced by the diamond sector include uncertainty resulting from regulatory changes, unreliable and reduced electricity supply, rapidly escalating production costs and falling rough diamond prices. Prices for rough diamonds fell approximately 15% during 2105 due to a variety of reasons: the economic slowdown in China, which resulted in weakened demand for diamond jewellery; stock market turmoil; and the difficulty cutters and polishers experienced obtaining credit. Following the decision to reduce production to better reflect current trading conditions, global diamond production has decreased.


Report Coverage


The South African Diamond Mining report describes the current market and focuses on developments in the rest of Africa which is responsible for 60% of the world’s diamonds by value. Also detailed are investments into the sector, recent corporate activity and factors influencing the success of the domestic mining industry. The report profiles 11 companies, including the three major local players, DBCM, Petra Diamonds which mines diamonds from four kimberlite deposits, and Trans Hex which sources its diamonds from alluvial and marine deposits.


Page
1. INTRODUCTION 1
2. DESCRIPTION OF THE INDUSTRY 1
2.1. Industry Value Chain 1
2.2. Geographic Position 5
3. SIZE OF THE INDUSTRY 6
4. STATE OF THE INDUSTRY 10
4.1. Local 10
4.1.1. Corporate Actions 11
4.1.2. Regulations 12
4.1.3. Enterprise Development and Social Economic Development 16
4.2. Continental 16
4.3. International 19
5. INFLUENCING FACTORS 21
5.1. Government Support and Intervention 21
5.2. Labour 23
5.3. Economic Environment 24
5.4. Information Technology 26
5.5. Research and Development (R&D) 26
5.6. Environmental Concerns 27
5.7. Mine Safety 28
5.8. Power Supply 28
5.9. Synthetic Diamonds 28
5.10. Conflict Diamonds 29
6. COMPETITION 30
6.1. Barriers to Entry 30
7. SWOT ANALYSIS 31
8. OUTLOOK 31
9. INDUSTRY ASSOCIATIONS 32
10. REFERENCES 33
10.1. Publications 33
10.2. Websites 33
COMPANY PROFILES 35
ALEXKOR SOC LTD 35
DE BEERS CONSOLIDATED MINES (PTY) LTD 38
DIAMONDCORP PLC 40
DMI DIAMONDS SOUTH AFRICA (PTY) LTD 43
DMI MINERALS SOUTH AFRICA (PTY) LTD 45
MWANA AFRICA HOLDINGS (PTY) LTD 47
NAMAKWA DIAMONDS HOLDINGS (PTY) LTD 51
PETRA DIAMONDS LTD 53
ROCKWELL DIAMONDS INC 56
THABEX LTD 59
TRANS HEX GROEP LTD 62
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