South African mining in crisis – comment by Yolanda Torrisi

Alrosa

South African mining in crisis – comment by Yolanda Torrisi

The mining industry in South Africa is in crisis owing to a combination of factors and there are no signs that it can recover in the short to medium term. Most of the factors stifling the industry can be related to government policy, which have hit internal and external investment very hard.

Chamber of Mines of South Africa CEO Roger Baxter, a former speaker at the African Mining Network, told the Paydirt 2017 Africa Downunder conference in Perth this month that business confidence in the country was at its lowest levels in more than 30 years.

He said key governance and policy challenges had eroded business and investor confidence, undermining investment. These challenges coupled with policy and regulatory uncertainty had frozen new investment in the sector.

The result was that real mining GDP in 2016 of R226 billion was smaller than it was in 1994 when it was R242 billion while real mining fixed investment had shrunk over the past two years.

Another consequence was that the mining industry in South Africa made an accumulated loss of more than R30 billion in 2015. Evidence of this can be found this year with 65% of the country’s once strong platinum mining industry not being profitable.

Roger Baxter said that despite the country’s mineral potential, since 2013 the policy perception index, a report card of investment attractiveness of mining policies, had deteriorated to 84th out of 104 global jurisdictions.

Critical factors affecting the investment attractiveness were:

* Uncertainty regarding the ownership element of the mining charter.

* Uncertainty created by the DMR’s unilaterally developed and imposed reviewed mining charter (RMC17).

* Uncertainty regarding the finalisation of the MPRDA Amendment Bill which is incomplete after being published nearly five years ago (eg remaining uncertainty on s11 approvals).

* Uncertainty regarding the Minister’s proposed s49 moratorium on new right and s11 applications.

* Uncertainty created by double financial provision for environmental rehabilitation.

He said it was with all the uncertainty, the mining industry had lost confidence in the DMR and its Minister.

“The industry does not believe that the approaches adopted by the DMR are serving the national interest of the country,” he said. “In essence, there is a freeze on investment- it is extremely difficult to get an investment committee to approve any new greenfields project.

“The economic opportunity cost of the failure to get the policy, legislative, administrative and operating environment right to promote investment, growth, transformation and job creation in RSA mining is material,” he told delegates, and the DMR had provided no assistance to help the industry through the crisis.

Yolanda Torrisi is Chairperson of The African Mining Network and comments on African mining issues and the growing global interest in the continent. Contact:yolanda@yolandatorrisi.com

Original article  http://www.africanminingnetwork.com/news/south-african-mining-in-crisis-comment-by-yolanda-torrisi/

ALROSA : 27.85 carat Pink diamond found

Alrosa

ALROSA has recovered a unique pink 27.85-carat diamond.

“Almazy Anabara”, a subsidiary of ALROSA, recovered a large pink rough diamond weighing 27.85 carats. This is a unique discovery: by far the largest company’s pink rough diamond had a weight of about 4 carats. If the company decides to cut this stone, it could become the most expensive polished diamond in the history of ALROSA.

The rough diamond has dimensions of 22.47 x 15.69 x 10.9 mm. The pink stone is of gem-quality and almost free of inclusions.

Most often ALROSA recovers pink and other colored diamonds at Severalmaz kimberlite pipes or placer deposits of “Almazy Anabara”. Colored diamonds weighing over 10 carats are extremely rare and recovered about once a year. As for the pink shades, by far the largest pink diamond of ALROSA weighed 3,86 ct – it was found by “Almazy Anabara” in 2012. Apart from this stone, for the last 8 years ALROSA recovered only 3 pink diamonds weighing over 2 carats.

“The unique characteristics of the diamond make it an extraordinary, rare stone of high value. Currently, experts of United Selling Organization of ALROSA and the company’s polishing division DIAMONDS ALROSA are examining the stone to make the decision: whether to auction it as a rough or cut it into polished diamond. Large stones, especially colored, are always in demand at auctions. But if the company decided to cut it, it would become the most expensive diamond in the entire history of ALROSA”, – said Evgeny Agureev, the head of USO ALROSA.

De Beers budget of $140M

De Beers budget of $140M for Diamond Marketing.

De Beers Group has announced it will invest more than US$140 million in diamond marketing this year – its biggest spend since 2008.

The increased investment will be focused on generating further consumer demand for diamond jewellery in the leading markets globally, with the greatest spend targeted in the US, China and India.

While the majority of the investment will support De Beers’ proprietary brands, Forevermark and De Beers Diamond Jewellers, the company will increase its spend on partnership marketing, including with the Diamond Producers Association and India’s Gem and Jewellery Export Promotion Council.

Stephen Lussier, De Beers Group’s Executive Vice President of Marketing and CEO of Forevermark, said: “Total consumer expenditure on diamond jewellery for the last five years collectively has been the highest on record – and the outlook is positive. However, we cannot take future growth for granted.

“Increasing our spend from a strong position will help support continued demand in both mature and developing markets, particularly among millennials, who are already the largest group of diamond consumers despite this generation not having yet reached its maximum earning potential.”

About De Beers Group

De Beers Group is a member of the Anglo American plc group. Established in 1888, De Beers Group is the world’s leading diamond company with expertise in the exploration, mining and marketing of diamonds. Together with its joint venture partners, De Beers Group employs more than 20,000 people across the diamond pipeline and is the world’s largest diamond producer by value, with mining operations in Botswana, Canada, Namibia and South Africa. As part of the company’s operating philosophy, the people of De Beers Group are committed to ‘Building Forever’ by making a lasting contribution to the communities in which they live and work, and transforming natural resources into shared national wealth. For further information about De Beers Group, visit www.debeersgroup.com.