The mineral wealth beneath the soil is the national heritage of all South Africans, and should be used to fulfil the socio-economic needs of the masses of our people, writes Nathi Mthethwa.
South Africa is well endowed in mineral wealth, but her children live in underdevelopment and poverty. This situation is what the diamonds legislation adopted by parliament in November 2005, in its own modest way, seeks to redress.
The ANC remains committed to the goal, proclaimed over 50 years ago, that the 'people shall share in the country's wealth'. Prophets of doom, like the Democratic Alliance, accused us of bringing in nationalisation through the backdoor. Nothing can be further from the truth. The industry is still owned and run privately. What the legislation seeks to do is to allow the majority of the people to share in this important national resource.
The ANC-led government, guided by the Freedom Charter, continues to advance policies and legislation that advocate social inclusion and social justice.
It is in this context that we passed the Diamonds Amendment Act and Diamonds Second Amendment Act.
At its National Consultative Conference in Morogoro, Tanzania in 1969, the ANC said: 'Today most of the wealth of South Africa is flowing into the coffers of a few in the country and others in foreign lands. In addition, the white minority as a group has over the years enjoyed a complete monopoly of economic rights, privileges and opportunities. An ANC government shall restore the wealth of our country, the heritage of all South Africans to the people as a whole. The mineral wealth beneath the soil, the banks, and monopoly industry shall be transferred to the ownership of the people as a whole.' The analysis at Morogoro was informed by the fleecing of the mineral resources and wealth of South Africa by the few. The diamond amendment legislation is a legislative tool intended to stop the fleecing of our mineral wealth and practicalise the ideals contained in the Freedom Charter.
This legislation seeks to revolutionise the South African mineral industry in terms of its outlook and operation. Consistent with the ideals contained in the Freedom Charter and the Reconstruction and Development Programme (RDP), the diamond amendment legislation embraces accountability, transparency, economic growth, redistribution and job creation.
The day of the adoption by Parliament of the diamond amendment legislation, 1 November 2005, will go down in history as the day on which a 138-years old industry ceased to be an exclusive business terrain. The application of the legislation will ensure equitable access to rough diamonds for all role-players, and this will stimulate the development and growth of the local beneficiation industry. The legislation confirms the continued centrality of the Freedom Charter in informing our policy and legislative development.
This piece of legislation aims to unleash a potential that was deliberately suppressed to sustain the downstream jobs in centres like London and Antwerp. The development of the downstream sector of the diamond value chain in South Africa, as advocated by the legislation, has an immense economic potential, as it will stimulate business development in the diamond industry and related industries. The legislation seeks make strategic interventions in the following areas: * Socio-economic impact: The legislation aims to provide impetus to create jobs for the unemployed. This will reduce the number of unemployed people in general and unemployed women, youth and graduates in particular. During a visit to India, the ANC study group on minerals and energy noted the impact of beneficiation on employment creation. The Indian beneficiation industry employs millions of people. The development of the cutting and polishing industry in South Africa will play an immense role in job creation here.
* Skills development: Through this legislation there is a potential for the unemployed and the retrenched, particularly women and youth, to be re-skilled and trained to work in the cutting and polishing industry.
* Equitable wealth distribution: The subsidiary aim of the legislation is to spread wealth within the industry for the benefit of the masses, and to avoid unnecessary advantage by the existing diamond cartels, which have been dominating the industry since the discovery of diamonds in the country. The sightholding system that is utilised by some major industry players has denied many small and medium players access to rough diamonds, and has contributed negatively to development of beneficiation, fair trade and competition. The provisions in the legislation create conducive conditions for new entrants from historically disadvantaged backgrounds to gain access into the industry.
* Access to rough diamonds: The legislation caters for the establishment of the Diamond and Precious Metals Regulator to oversee implementation, administration and control of all matters relating to the purchase, sale, beneficiation, import and export of diamonds; and the establishment of the Diamond Exchange and Export Centres (DEECs). These will facilitate the buying, selling, export and import of diamonds. The regulator empowers the State Diamond Trader (SDT) to acquire and supply unpolished diamonds to local diamond beneficiators. The SDT will purchase a portion of rough diamonds based on the requirements of local beneficiators and sell them to local beneficiators at a fair market price. This is intended to stimulate the growth and development of small role-players, and it will enable those who did not have access, to freely access rough diamonds. This will also help to achieve broad-based black economic empowerment in the mining sector.
It will stimulate both competition and economic growth in the country for the benefit of all role players, both big and small. The SDT is also mandated to promote the industry through research, support and development.
As the ANC-led government, we envision a situation where we are going to have an 'Africa Mix' in the diamond industry as opposed to the current 'London Mix'. The 'London Mix' refers to the convergence of diamonds from various diamond producing countries in one centre in London.
Consistent with the New Partnership for Africa's Development (NEPAD), diamond producers from Africa should integrate efforts to give effect to the vision of intracontinental trade and business development. Major producers of diamonds like Botswana, Angola, Namibia and the Democratic Republic of Congo do not have a beneficiation industry. The diamond amendment legislation seeks to set a precedent on the continent and in the developing world.
As the ANC we believe that the mineral wealth beneath the soil is the national heritage of all South Africans. It should be used to fulfil the socio-economic needs of the masses of our people. This legislation is a vehicle for the realisation of the wishes of the masses, as contained in the Freedom Charter, that the people share in the wealth of the country.
Nathi Mthethwa is chairperson of ANC study group on minerals and energy.
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