Small and junior diamond miners are facing persistent challenges from a policy and regulatory perspective, which has resulted in a significant decrease in the number of small miners over recent years, a report titled ‘Status of the South African Small and Junior Diamond Mining Sector’, states.
The report, which, was written by Nelson Mandela University geology graduate (MSc) Sinazo Dlakavu was published in August by the Africa Earth Observatory Institute, under the auspices of the Nelson Mandela University.
The gradual but significant decline in the number of small and junior diamond miners has contributed to the rising unemployment rate in South Africa.
Dlakavu notes that diamond mining and prospecting in these regions of low economic activity, could be boosted with an uptick in diamond mining activity by implementing fit-for-purpose legislation, employing locals and creating better mining and prospecting supply chains and services.
Other than farming, a sector that is becoming increasingly mechanised and therefore requires fewer employees, the small and junior diamond sector was, and still is, a key employer in the Northern Cape and the North West provinces, thereby signifying its importance, she notes.
MAJOR CURRENT CONCERNS
The major concerns cited by small and junior mining sector respondents to surveys done by Dlakavu include six key elements, the first of which was safety and security. Eighty-six per cent of respondents voiced concern about this element.
She says one particular marine-based diamond miner feared it would receive insufficient protection from the South African Police Service if its operation came under attack by criminals.
The second concern was that of lengthy waiting periods for licence applications to be processed and granted, as well as the general inefficiency of the various regional Department of Mineral Resources and Energy (DMRE) offices. Eighty-three percent of respondents reported this as being a challenge.
Sixty-nine per cent of respondents, meanwhile, flagged unreliable electricity supply from State-owned power utility Eskom as a concern. Electricity prices were also mentioned as being increasingly burdensome.
Fourth on the list of concerns were challenges in complying with broad-based black economic empowerment mandates. Sixty-four per cent of respondents reported this as a concern.
The fifth concern was finding skilled labour. Sixty-two per cent of respondents cited the skills challenge as a concern.
In this regard, the report shows that the average working experience is 26 years, and the newest entrant has two years experience. This could mean that the legislation is discouraging to new entrants, especially black people, says Dlakavu.
Lastly, 52% of respondents were worried about unreasonable labour costs. Small and junior diamond miners expressed that paying their employees is not a problem, with the report showing that they spend about 23% of their yearly turnover on salaries.
However, the miners expressed that complying with the Mine Health and Safety Act is difficult because it caters for big mines. One interviewee proposed that perhaps the small and junior diamond mines comply with the Occupational Health and Safety Act instead.
Dlakavu proposes five recommendations to ease the burden and open the small and junior diamond mining industry to newcomers, starting with the development of a fit-for-purpose sector-focussed mining policy and associated regulations.
She adds that the South African Mineral Resources Administration system, requires modernisation; this revision would make the process of applying for and being granted a licence easier and also garner interest among newcomers.
“Small and junior diamond miners need practical and creative mechanisms to transform this industry. This could be boosted with the creation of a small diamond miners fund, to support especially black and upcoming small diamond miners; and the provision of information and technical assistance from institutions such as the Council for Geoscience and Mintek,” she says.
Independent diamond producer Lyndon de Meillon said Dlakavu’s report is welcomed by the industry as it provides accurate figures on the state of the industry, confirming what small and junior diamond miners have been trying to convey to government for the past ten years or more.
“We have lost about 90% of the companies involved with alluvial diamond mining over the past 17 years,” he says, adding that the next challenge is to convince government to use the facts and figures collected in this independent study as a basis for future regulations and legislation in an effort to ease pressure on the industry.
“From this report, it is clear the biggest reason for the decline in the industry is a failure of the current policy framework,” he says.
South African Diamond Producers Organisation (SADPO) chairperson Gert van Niekerk echoes De Meillon’s sentiment that Dlakavu’s report, for the first time, provides scientifically-based facts and figures that the organisation can use in terms of its engagements with all role-players in the industry, as well as government.
“We are commending Dlakavu and her team for this report. It provides us with a tool that we can use in terms of our negotiations with the legislative and regulatory bodies we have to deal with,” he says.
The report is the first data set that has been scientifically done and is something SADPO would attempt to update on a regular basis, adds Van Niekerk.
“One of the biggest challenges I face when talking to the other role-players in industry is their lack of understanding of our unique circumstances, and this study goes a long way in helping SADPO to address the misunderstandings of our unique type of mining,” he states.
Although Van Niekerk says new legislation is proposed for the artisanal and small-scale mining grouping, Dlakavu’s report will be useful to illustrate that legislation should be commodity-specific, because the one-size-fits-all approach has been harmful to small-scale miners. miningweekly