Post-mining value-adding activities such as diamond cutting and polishing, jewellery manufacture and retail are referred to as beneficiation. These activities may not be carried out by the family of companies but are important to producer and other countries, such as India. In South Africa, Botswana and Namibia, we work to build beneficiation opportunities.
An example is the establishment of DTC Botswana which will bring diamond sales activities to Botswana for the first time and increase the number of cutting and polishing factories there.
Much of global cutting and polishing currently takes place through DTC Sightholders in India. Setting up such an industry in southern Africa is a challenge as labour costs are higher than in India. At the moment only the larger, higher quality diamonds can be polished cost-effectively in southern Africa. Nevertheless, we recognise the imperative of building viable downstream industries in southern Africa.
South AfricaHistorically, more beneficiation has been undertaken in South Africa for diamonds than for any other mineral resource. In 2005, DTC sold more diamonds – 104% – to local cutters for processing in South Africa than were produced by DBCM's mines. This includes only those diamonds whose processing the local industry considers economically viable.
For the 2005-2008 contract period, the number of South African Sightholders increased to 19, up from 14 in the previous period. This represents 20% of all DTC Sightholders and 11% (US$719 million) of the value of diamonds sold in 2005. In addition, the proportion of Sightholders that have empowerment partners has increased to about 60%, compared to just over 20% during the last supply period. Our South African Sightholders provide employment to approximately 2 100 personnel.
Beneficiation extends beyond cutting and polishing and into marketing and jewellery manufacturing. The DTC Shining Light Diamond Design Awards, launched in 1996, are the premier jewellery design competition in South Africa. They promote South African jewellery design talent overseas and create opportunities for skills development and employment.
Skills development is also the aim of a diamond jewellery academy in Kimberley that is currently under consideration by De Beers and the Northern Cape provincial government. The academy will provide accredited courses covering rough diamond evaluation, cutting and polishing, polished grading, jewellery design, jewellery manufacturing, marketing, retail and distribution.
Local beneficiation also contributes to social investment. In May 2006, nine South African Sightholders, brokers and the DTC initiated "Diamonds for Dignity". This initiative links into the ACFS Community Education and Feeding Scheme to provide meals to children in Soweto. "Diamonds for Dignity" will raise some R316 000 (US$49 000) in 2006 and feeds about 1 000 children on a daily basis.
BotswanaDe Beers Botswana and the government of Botswana have recently taken a major step towards creating a sustainable beneficiation industry in the country. In May 2006, agreements to establish DTC Botswana were signed. DTC Botswana is a 50/50 partnership between the government of Botswana and De Beers. The new company will sort and value all Debswana's diamond production and sell rough diamonds to the local cutting and polishing industry. De Beers has also agreed it intends to aggregate diamonds from around the world in Botswana through the creation of a further, wholly owned DTC entity. This process of aggregation entails the mixing together of DTC's global productions in order to produce the DTC's unique product, the sales boxes.
NamibiaDTC Namibia sorts and values Namdeb's diamond production. To increase the technical capacity of local employees with respect to sorting and valuing, a Diamond Academy was opened in 2006.
Namibia is the only country where our operations include cutting and polishing, through the Namdeb subsidiary of NamGem. With 129 employees, NamGem is a major source of employment for the town of Okahandja. In 2005, NamGem increased production by 42% over 2004 as the result of amore efficient business model. Further expansion is planned for the future, enhancing the benefits to all NamGem stakeholders. In 2005, NamGem diamonds were made available to a number of local retail and jewellery outlets, raising the value added accruing to Namibia.