Steinmetz Diamond Group

Who is the Steinmetz Diamond Group

Track record in Southern Africa Diamond Industry – today South Africa - concerns

Steinmetz Diamond GroupSteinmetz Diamond Group

Steinmetz Southern Africa

South Africa Namibia

Ascot Diamonds

ABT DiamondCutting Works

Giyela Diamonds Namcot Diamonds

B.E.E.Partners

B.E.E.Partners

B.E.E.Partners

30%30%40%

Group’s track record• Ascot Diamonds formed in 1988

• ABT Diamonds (one of the first local BEE partnerships in the industry) was established in 1997 – specialises in Fancy Cuts (in house training).

• Combined Assets in excess of R1 Billion

• Namcot Diamonds was formed in 2000

• Giyela Diamonds formed in 2003

• Employment level at present is 430 in Southern Africa & the largest employer in South Africa

Diamond Industry - today

India 800,000

China 25,000

Thailand 7,000

South Africa 2,300

Israel < 2,000

Belgium < 1,000

New York 200

Employment by cutting center

Labour costs varies from US$ 8 pc to US$ 200 pc

South Africa – Concerns

Strong Rand increasing labour costs

Value Added Tax

Free trade activities restricted

South Africa – Concerns

The design and manufacturing process of large & special stones is seldom completed in one step.

It is often required to temporarily export the stones due to

• high degree of difficulty

• specialised process such as lasering, cleaving etc

• professional opinions

• seeking potential buyers

or any other partial processes that will assist in maximising the outcome

Deferment of payment of Export Duty (Section 64)

South Africa – Concerns

We believe that if Section 64 is removed it should be replaced by a

method that will allow the Regulator (New Diamond Board) to judge

each deferment case on its merits so as not to

DISADVANTAGE THE LOCAL INDUSTRY

Deferment of payment of Export Duty (Section 64)

South Africa – ConcernsBeneficiators not allowed to sell/export rough (Section 40

permit)• Not all beneficiators rough requirements are alike

• The % of suitable rough bought by a beneficiator varies dependent on the source

• Leftovers from the sawing process (fragments) are also categorised as rough

South Africa – Concerns

• The removal of s40 permits affects both new entrants & existing beneficiators alike

• It is not economically viable to manufacture the full range of rough in South Africa (10% rule of thumb)

• Often, factories specialise in specific ranges of rough

(i.e. 1 shoe does not fit all)

Beneficiators not allowed to sell/export rough (Section 40 permit)

South Africa – Concerns

• The inability of any beneficiator to dispose of non economical rough/ fragments or any other non suitable goods will impair the beneficiator financially and unfairly disadvantage it.

• The government should not put the industry at such a disadvantage to its international competitors.

• Currently s40 permits are controlled & issued by the Diamond Board & we suggest that the new regulator should have the similar powers to control this matter.

Beneficiators not allowed to sell/export rough (Section 40 permit)

South Africa – Concerns

• No information with regards to the proposed regulations of the State Diamond Trader is available

• The possibility of private funding & combined with board representation may lead to a conflict of interest

• The funding of the State Diamond Trader should remain with government

Funding of and Representation of State Diamond Trader (Section 17)

South Africa – Concerns

The bill should address the issue of Export Duty on Non SA goods

It is silent at present

Non South African Goods

Other Issues

It is crucial for an industry to have a consistent suitable supply of rough in order to be sustainable and grow.

South Africa

Thank you