Diamonds

Leviev plans cutting centres

David McKay | Mon, 24 Oct 2005 13:00

[miningmx.com] --THE DEBATE with regard to finding profitable capacity in South Africa’s diamond beneficiation has been given a twist by Lev Leviev, the billionaire diamond merchant. Bloomberg News reported that Leviev has unveiled plans to establish one or possibly two diamond cutting centres at a cost of US$116m.

That comes at a time when De Beers’ claims that it’s not yet practical to polish more diamonds in SA. The giant diamond group, in which Anglo American has a 45% stake, says polishing rough gems costs up to five times more in SA than in India, where labour is cheap and skills to polish smaller diamonds are much better.

“We support the legislation”

One consequence of the beneficiation laws being established by SA’s Government is the creation of a State diamond marketing company that would buy a percentage of miners’ uncut diamonds and then sell them “at fair market price” to SA processors.

Leviev, through his business spokesman, has said that he embraces the new legislation. De Beers tends not to favour it because it dilutes its already weakening grip on the diamond market.

“We support the legislation,” said Dan Kampel, a spokesman for Leviev told Bloomberg News. “If we get the right supply of diamonds at the right price we’re committed to establishing a plant employing more than 1 700 people. It can be one or more plants.” SA employed around 2 000 to 2 00 people last year.

Leviev’s diamond processing activities in SA have been consolidated into Khadima Mining, in which Leviev has a 75% stake. SA investors led by Khapametsi Maleke and Diliza Mji hold the remainder. In its submission to a Parliamentary minerals and energy affairs sub-committee in Cape Town, Khadima said: “It’ a disingenuous myth that it’ not economically viable to polish diamonds in Africa. This myth has been proven wrong by Leviev Group in Namibia and SA.”