B Sonjica: Antwerp World Diamond Conference

16 October 2007

Ladies and gentlemen, it gives me great pleasure to have this opportunity to
address you today. This forum, the Antwerp World Diamond Conference, is a
critical annual event that draws many important players in the diamond
industry, from production to manufacturing, and numerous of these players being
South Africans. I am happy to inform you that we have amongst us several
members of the South African diamond business sector, who are here as part of
our deliberate effort to facilitate trade and investment between our countries.
I encourage you to engage with and trust that you will find value in doing
so.

For over a century, Africa's mining industry, largely supported by the
production of a range of mineral and petroleum resources, has made an important
contribution to the continent's economy. It has provided the impetus for the
development of the existing physical infrastructure and has contributed to the
establishment of secondary industries in a few of these countries.

Whereas the mineral industry has become a well-established and resourceful
sector of these economies, Africa remains a leading world supplier of a range
of minerals of consistently high quality. While the mining industry continues
to acquire a high degree of technical expertise, local people in these mining
dependant economies have not acquired all the skills they need to grow and
sustain vibrant economies beyond mining.

Additionally, most of these economies are not able to attract diverse and
sustainable levels of investment; however, their mining industries have
developed some ability to mobilise capital for new development. This ability is
of course limited by the inevitable depletion of mineral resources in the long
term.

Africa has now organised itself to deal with these and other challenges of
development that they face. We have created regional and continental platforms
such as the Southern African Development Community (SADC), the New Partnership
for Africa's Development (Nepad), and the Africa Mining Partnership (AMP). At
the continental level, more than twenty-five mining ministers meet annually to
evaluate progress made on projects focused on environment, health and safety,
beneficiation, social responsibility and investment. It is interesting to note
that SADC comprises of member states with important reserves of diamonds such
as Angola, Botswana, Democratic Republic of Congo, Lesotho, Namibia and South
Africa.

These entities share a similar vision, which includes the achievement of
development and economic growth, poverty alleviation, enhancement of the
standards and quality of life of the people of Southern and the rest of
Africa.

In South Africa, mining has become a focus of development in terms of
stimulating employment and economic growth, entrepreneurial development and
black economic empowerment and. Following our drive for transformation, several
black-owned firms are now beginning to play an important role in the mining
industry. The last few years has seen the emergence of several empowerment
companies of substantial size in South Africa's mining and resources
sector.

We firmly believe our abundant mineral treasures must increasingly be
converted in the future into economic assets, both tangible and intangible,
that will not only favour the mining companies producing them but also
maintain, nourish and develop the economies of the countries affected in the
region. We have also long seen the necessity of having remunerative activities
taking over from mining once exploitation comes to an end. Ore depletion is a
fact of life and all ore-bodies, even large ones, come to the end of their
usefulness. It is with this in mind that we foresaw the need to develop the
Mineral and Petroleum Resources Development Act (MPRDA). We did this in order
to put emphasis, amongst other issues, on the social and labour plan,
implementation of integrated development plans in a coordinated fashion and
beneficiation. We have consolidated strategies on the beneficiation of precious
minerals through the Diamond Amendment and the Precious Metals Acts, which we
have started to implement.

Amendments to the Diamonds Act are aimed at creating the framework for
further downstream value addition and investment in the diamond-manufacturing
sector. It was firmly believed that diamond legislation as it was found in the
previous Diamond Act did not benefit cutters and polishers who make up the
first stage of value addition in the South African Diamond Value Chain.

The Amendments to the Diamonds Act introduce a new era in regulating
precious minerals and metals in South Africa:

* For the first time in South Africa the trading of both diamonds and
precious metals is regulated by a single authority – the Diamond and Precious
Metal Regulator. This regulatory function replaces the currently existing South
African Diamond Board
* The State Diamond Trader has been established to purchase and supply rough
diamonds to the domestic industry as well as promoting research and
development. The Board of Directors and the Chief Executive Officer have been
appointed and they are hard at work as we speak, to ensure that the trader is
in a position to start operations as soon as possible
* The Diamond Export Centre will be established for controlling diamond
exports. Local downstream processors and foreign buyers will also be allowed to
purchase diamonds from this centre.

The new diamond trader will impact businesses in South Africa positively as
it comes with a sustainable security of supply. This security of supply is not
only dependant on the country's production as the SDT will be able to import
unpolished diamonds if the need arises.

Going forward, we are focusing our energies on attracting the right
investors into South Africa, facilitating the financing of diamond mining,
trading, polishing and marketing. This expertise is seriously lacking in South
Africa, but it is vital, because it is what makes the diamond industry work,
especially if the value chain is to be extended.

Botswana, Namibia and Angola are making noticeable strides into diamond
cutting and polishing, and we await the outcome of their endeavours with eager
anticipation.

Further, downstream value addition would have a significant multiplier
effects in the economies concerned, in the form of economic spin-offs such as
financial and insurance services, equipment and raw material services,
transport, energy and water supply services and business tourism. This
inevitably also leads to multiplier effects benefiting other industries linked
to the mineral and metal processing sector, such as construction, energy,
engineering, environmental services, equipment/machinery supply, transport,
logistics, financial services, insurance and security services.

Ladies and Gentlemen, for so long, many countries in Africa, so wonderfully
blessed with rich mineral deposits, have been exploited and denuded of mineral
treasures and yet received an inadequate reward for the yielding up of these
assets. Shouldn't we make today a turning point for the whole continent? I
believe for us to achieve that today we have to reverse the trend of being
mining dependant as resources are dwindling and to develop skills and expertise
in value addition that is, cutting and polishing so that we can have
sustainable businesses beyond mining.

I would like to urge all of you to take part in the Investment Seminar
starting this afternoon where you will get an opportunity to listen to and
engage on topics of great importance to you. Our programme is lined up with
officials from national and provincial government as well as the private sector
and the seminar promises to be interesting.

Thank you for your attention.

Issued by: Department of Minerals and Energy
16 October 2007
Source: Department of Minerals and Energy (http://www.dme.gov.za/)