Mineral and Petroleum Resources Minister Gwede Mantashe has called for the marketing of South African natural diamonds across the world, as the sector faces a decline in demand and price.
The local sector now faces an added challenge of a US tariff of some 30%.
South African natural diamonds have not been excluded from the US tariff list, while minerals including gold, platinum group metals and coal enjoy exemption.
At a stakeholder consultation with the diamond sector on Tuesday, Mantashe said he was “convinced” that the sector needs an injection of aggressive marketing as a solution.
“Our biggest trading partner is China. The US is the second biggest trading partner for South Africa. With the 30% tariff… you are not going to escape it. I’m very convinced that the marketing of natural diamonds is a necessary intervention because you cannot replace natural diamonds with lab grown diamonds.
“We must market natural diamonds, but we must produce more natural diamonds, and the beneficiation thereof is quite critical. We must cut and polish market value added diamonds. Value addition must happen close to the point of production.”
The Minister encouraged diamond producers to “express their views” during the session and encouraged a “flow of ideas” on how government can intervene.
“We are having this platform today to hear your views. You agree that you want to be part of that agreement of [the] marketing of natural diamonds. Tell us and we will do it. However, we thought we should not do it without talking to [the sector]. I am convinced that it’s the right intervention. We must market…more aggressively.
“Natural diamonds are competing with lab grown [ones]… particularly in the West. [Some] 25% of [the] diamond trade in the US is lab grown. It’s very small in China… and India.
“In the West, where there is a big market for natural diamonds, lab grown diamonds are competing with us aggressively. What do we do? That’s the question we are putting to you. Help us think through this issue and give us ideas,” Mantashe said.