CHAPTER 8
The influence of foreign companies and international diamond combines on the supply of diamonds to the South African Diamond industry and the export of diamonds from South Africa.
8.A WRITTEN AND ORAL EVIDENCE RECEIVED BY THE COMMISSION
8.1 CENTRAL SELLING ORGANISATION (CSO)
Mr G Penny, on behalf of De Beers, (submission 24) says that historically, London was established as the leading rough diamond distribution centre. Today, London is geographically well located to:
Ø Receive world production
Ø Supply cutting centres
Ø Promote jewellery to major international markets
Ø Access financial and banking institutions.
Mr L A Lincoln of De Beers also points out (submission 15A) that the CSO, by encouraging the development of cutting centres outside traditional ones (notably India), has created a market for the near-gem quality diamonds produced in South Africa.
Trans Hex points out (submission 75) that South Africans live in a global, multinational economic world and that the entire diamond industry owes its existence to the benign ministrations of a particular “international combine” known as De Beers. South Africa should welcome foreign interest and investment in the country and should encourage exports of all kinds, including rough diamonds.
8.2 OTHER AFRICAN COUNTRIES
As referred to elsewhere, the Diamond Merchants’ Association submits that the Commission should examine ways for the Government to use its favourable economic status in Africa to encourage the formation of a “Common Market of African Diamond Producing Countries”. The formation of such a market has the potential of making new sources of supply available to the South African industry. The Association adds that by establishing suitable facilities and services to encourage other African countries to bring their diamonds to South Africa for sale or manufacturing, South Africa would be able to match and in some cases surpass the markets in the United States of America, Belgium, Israel and the Far East.
Mr S W Hubner (submission 47) is of the opinion that no rough diamonds of above 0.3pt should be allowed to leave the country and that such diamonds should be cut in South Africa.
8.3 EXPORTS: THE DIAMOND BOURSE OF SOUTH AFRICA
Mr E Blom, Chairman of the Diamond Bourse (submission 30) mentions that some critics of the Diamond Bourse have stated that the Bourse is simply a procedure whereby goods can qualify for exemption of export duty. The Committee of the Bourse, although acknowledging the fact that the majority of goods offered for sale on the Bourse are exported from South Africa, feels that the process ensures that the true market value of the goods is stated when exported. Mr Blom says that this in turn ensures that the true value of foreign earnings is repatriated back to South Africa.
8.4 EXPORTS: FOREIGN DEALERS
Proval, (submission 65) is of the opinion that the ready access which foreign dealers have to rough diamonds which are available for sale in South Africa limits the opportunities for South African diamond dealers and manufacturers to purchase diamonds for cutting in South Africa. Some measure of protection for South African cutters may in the short term assist the local cutting industry to become more competitive when viewed in global terms.