Start-up diamond companies moot plans for privately-established development fund

LENGTHY delays in securing mining permits and licences, onerous and inappropriate regulatory requirements, lack of funding for entrepreneurs, and a Mining Charter and implementation guidelines which are impractical for small operators are among the problems start-up and existing alluvial diamond miners in the Northern Cape face.

“There are no proper support mechanisms for new entrants to the industry,” said Amo Marengwa, a member of the South African Diamond Producers Organisation (SADPO) and owner of Blue Banjo, a start-up diamond company.

Marengwa was to see a privately-owned Mining Development Fund to be developed which would be supported by means of annual contributions of 1% from gross sales from its beneficiaries. “The battle to find funding is forcing many black mining entrepreneurs to rent out their land to the better-established white miners,” he said. “Apart from the funding, we face two other serious challenges – lack of access to geological information and lack of access to markets.”

Said Lyndon de Meillon, a geologist and founder of Paleostone Minerals, a consulting company to the diamond sector for 20 years: “The fund should be intended to support black mining entrepreneurs and business entities in the raising of capital for projects at the development stage and develop them to a point until they are stable and sustainable or attractive for acquisition by larger companies”.

1 COMMENT

  1. When will Ago realise that capital follows Good people, Good projects and Good political climates. Right now SA has very few of ALL above. Forcing people to contribute so some “punter” thinks because he’s been given a deposit and in his ignorance wants to chase after it is naive and stupid. The only money you will get is from the PIC and other SOE’s which are all bust. So get used to treating capital investors like they want and you will maybe get support. Saying you are black and they are white won’t cut it any more, it only reflects your own prejudice and racism.

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