By Siobhan Millward - Venmyn

In 2005 the Diamond Act (Act no. 56 of the 1986) of South Africa was amended to increase both the availability of rough diamonds as well as participation through the value chain in South Africa. In drafting the Diamonds Amendment Act of 2005, the old Diamond Act was reviewed to promote and implement beneficiation in South Africa, promote equitable access to the country’s mineral resources and in turn, create jobs.

The new Diamond Act has done away with the South African Diamond Board and created the South African Diamond and Precious Metals Regulator, whose principle responsibilities are to:

  • ensure that South African diamond resources are exploited and developed to the best interests of the people of South Africa,
  • ensure beneficiation in the country; and
  • ensure compliance with the Kimberley Process .

Additional changes to the Diamond Act included:

  • empowering the Regulator to establish a Diamond Exchange and Export Centre where diamonds are required to be offered first to local buyers;
  • establishing the State Diamond Trader, a subsidiary of the Regulator, who will acquire a percentage of all SA production;
  • disclosure of all synthetic and treated diamonds; and
  • review of the types of diamond licences.

Further amendments to the Regulations of the Diamond Act (Act no. 56 of the 1986) under the newly established South African Diamond and Precious Metals Regulator were gazetted on the 9th July 2007, which included the review of specific types of licences. Venmyn use the guidelines and regulations set out in the relevant mining Acts to adequately provide services to our clients, and therefore closely analyse the regulations to ensure efficient and speedy dealings with the relevant mining laws. Venmyn have noticed minor correlation problems in the Amendments to the Regulations these are between the regulations and the corresponding application forms (in the Annexure). These errors are highlighted below:

  • under Section 2F “diamond beneficiation licence”. The regulations require a:
    • proposed business plan, inclusive of the broad-based socio-economic empowerment charter requirements, which is the first condition mentioned under the issuing of the licence; and
    • a tax clearance certificate;

both of which are not mentioned in the accompanying form “Form DB”;

  • under Section 2S “an application for certificate entitling person to be in lawful possession of unpolished diamond”. The accompanying form “Form DC” sets out a requirement to include the characteristics, mass and value of unpolished diamonds, where this is not a requirement for the regulations; and
  • under Section 2V” an application for permit entitling person to sell, export or import unpolished diamond”. The regulations require three items which are excluded in the accompanying application form “Form DP”, these include:
    • source of unpolished diamonds;
    • proof indicating the source; and
    • a tax clearance form.

The amended regulations represent significant advancements and improvements to the previous legislation, focused on diamond sales and allow for greater transparency and the much talked about, local beneficiation. As always, Venmyn will use all our resources to overcome the errors and continue providing the high quality work that our customers have become accustomed to.

Please direct any further enquiries to info@venmyn.com or call +27 11 783 9903.