27 October 2005
Cape Town — President Festus Mogae yesterday appealed to South Africa to allow its diamonds to be mixed in Botswana, effectively asking for changes to a controversial law before parliament.South Africa's parliament was due the same day to pass the Diamond Amendment Bill, which aims to form a state diamond trader to help stimulate more jewellery manufacturing and gem cutting, especially by blacks, in the world's fourth largest diamond producing country.
The parliamentary minerals committee last week dismissed warnings from De Beers, the world's largest diamond producer, that the law could quash plans to move its aggregation centre from London to Gaborone."My second major request is for you to permit your diamonds to be aggregated by the diamond trading corporation in Gaborone, instead of London," Mogae told a joint sitting of South Africa's parliament.Mogae said diamonds could still be made available to South Africa's cutters and polishers with the aggregation centre in Gaborone.
The diamond legislation was taken off the parliamentary programme to make way for Mogae's address and will be debated next week. The law has been heavily criticised by mining houses, who have argued that it may lead to mining closures and job losses. Diversified miner Anglo American, which owns 45 percent of De Beers, said it could lead to the demise of the diamond company's powerful marketing arm, Diamond Trading Company.
Abe Mngomezulu, Deputy Director General of the Department of Minerals and Energy, said he could not comment on Mogae's speech, but added that aggregation could still take place under the proposed diamond legislation."After the South African state diamond trader has taken its portion of production, what is left, the companies can do anything with it," he told Reuters."They can sell it within the country or they can export it for aggregation or they can do anything. It's only a small portion that will have to be made available for local consumption," Mngomezulu said.The percentage of production that the state trader will take will be gazetted before the law is implemented.
Mogae also appealed to South Africa not to build power plants that would rival the construction of a massive thermal power station in Botswana.
"Instead of building rival power stations, you can easily expand the exports of your high quality cooking coal to Japan and India, both of which countries need it badly," Mogae advised.
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