ALLUVIAL DIAMOND MINING
SA missing a gem of an opportunity for creating jobs, wealth
A short drive from the edge of the gold belt west of Johannesburg lies one of the world’s biggest alluvial diamond deposits, stretching deep into the Atlantic Ocean. But onerous, costly regulations, corruption and nit-picking officials are destroying a once-vibrant junior mining sector, say a diminishing number of diggers.
Digger after digger talks of how difficult it has become to operate small mines that dig into ancient riverbeds more than 100-million years old, and an even older seafloor.
These deposits should lend themselves to small-scale mining, wealth creation and employment across hundreds of kilometres stretching through farmlands, impoverished towns and settlements where unemployment is rife and work opportunities outside agriculture are slim. But that isn’t the case.
Once 4,000 miners employed 25,000 people, but this has dropped to about 150 with a workforce of 5,000, said Gert van Niekerk, chairman of the South African Diamond Producers Organisation, representing the majority of the miners.
"We have to stress to the government and the mines ministry that this sector can work if treated properly. It can create jobs and keep the economies of so many little towns alive, something that’s not happening now."
Many of the miners, who call themselves diggers, speak on condition of anonymity for fear of persecution by officials from the departments of mineral resources and water affairs.
"For those who think rhinos are an endangered species, the diamond diggers are at far greater risk," said a digger employing 20 people. He says the safety regulations are for larger mines, with a crew of health and safety officials to administer them. The small miners need about 20% of the regulations. Attempting to comply with all the regulations is distracting for management, who rely heavily on a small army of expensive consultants.
Those who continue to mine talk of an increasingly difficult and costly operating environment. Compliance with the Mining Charter, the Mineral and Petroleum Resources Development Act, the Mine Health and Safety Act and a host of other regulations governing water and the environment is forcing them out of business as their profit margins disappear and tolerance for overbearing and corrupt officials evaporates.
Visiting miners between Kimberley, the historical home of SA’s diamond mining industry, up to Wolmaransstad, the message that emerges is the same: more and more diggers are shutting down, laying off staff and selling equipment as they buckle under the heavy costs of regulatory compliance, rising diesel costs and paying consultants. And paying bribes.
A safety consultant at one of the mines talks of more than 100 clients all reporting attempts to secure bribes by mineral department inspectors or diggers offering cash after reaching the end of their tether with petty officialdom, some visiting tiny operations twice a month and spending entire days poring over documents and issuing threats of suspension notices for spelling mistakes.
"For some inspectors it’s much easier to sit in the office at these small operations and spend hours and hours on paperwork, which now seems to be much more important than the actual working conditions outside," the consultant said.
Another warned of steering clear of bribes. "The minute you pay a bribe to one official, suddenly everyone in the department will come looking at parts of your operations and make your life difficult until you pay them. The amount for bribes has gone from R5,000 to R15,000. Can you imagine what that does to your costs?
"You just don’t want to get into that position."
Mineral Resources Minister Gwede Mantashe says he is fully aware of the corruption and dysfunctional nature of regional offices, and he has ordered a crackdown on corruption, starting with audits in Limpopo, where the regional office has been temporarily closed because of rampant intimidation and corruption, and in Mpumalanga and the North West.