State-owned forestry company Safcold and alluvial diamond miner Alexkor both need to diversify, Public Enterprises Minister Lynne Brown says.

Alexkor’s sustainability was a challenge and its business model needed to diversify the business away from its dependence on diamonds, she told members of Parliament’s public enterprises committee on Wednesday.

This could include venturing into other minerals options, including coal and more downstream beneficiation.

Alexkor could also possibly branch out of the sector if Parliament approved a change in its mandate.

With regard to Safcol, Brown said the sustainability of the company was affected by tough traditional markets and an inability to access new markets due to a limited product offering.

"The business is over-reliant on sawlog product and needs to develop alternative product lines based on increased value addition. (This would require) investment capital and the business is constrained in this regard," Brown said.

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