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Steinmetz Diamond Group

Steinmetz Diamond Group

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Steinmetz Diamond Group

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  1. Steinmetz Diamond Group • Who is the Steinmetz Diamond Group • Track record in Southern Africa • Diamond Industry – today • South Africa - concerns

  2. Steinmetz Diamond Group

  3. Steinmetz Southern Africa South Africa Namibia Ascot Diamonds B.E.E. Partners B.E.E. Partners B.E.E. Partners 30% 40% 30% ABT Diamond Cutting Works Giyela Diamonds Namcot Diamonds

  4. Group’s track record • Ascot Diamonds formed in 1988 • ABT Diamonds (one of the first local BEE partnerships in the industry) was established in 1997 – specialises in Fancy Cuts (in house training). • Combined Assets in excess of R1 Billion • Namcot Diamonds was formed in 2000 • Giyela Diamonds formed in 2003 • Employment level at present is 430 in Southern Africa & the largest employer in South Africa

  5. Diamond Industry - today Employment by cutting center Labour costs varies from US$ 8 pc to US$ 200 pc

  6. South Africa – Concerns Strong Rand increasing labour costs Value Added Tax Free trade activities restricted

  7. South Africa – Concerns Deferment of payment of Export Duty (Section 64) • The design and manufacturing process of large & special stones is seldom completed in one step. • It is often required to temporarily export the stones due to • high degree of difficulty • specialised process such as lasering, cleaving etc • professional opinions • seeking potential buyers • or any other partial processes that will assist in maximising the outcome

  8. South Africa – Concerns Deferment of payment of Export Duty (Section 64) We believe that if Section 64 is removed it should be replaced by a method that will allow the Regulator (New Diamond Board) to judge each deferment case on its merits so as not to DISADVANTAGE THE LOCAL INDUSTRY

  9. South Africa – Concerns Beneficiators not allowed to sell/export rough (Section 40 permit) • Not all beneficiators rough requirements are alike • The % of suitable rough bought by a beneficiator varies dependent on the source • Leftovers from the sawing process (fragments) are also categorised as rough

  10. South Africa – Concerns Beneficiators not allowed to sell/export rough (Section 40 permit) • The removal of s40 permits affects both new entrants & existing beneficiators alike • It is not economically viable to manufacture the full range of rough in South Africa (10% rule of thumb) • Often, factories specialise in specific ranges of rough • (i.e. 1 shoe does not fit all)

  11. South Africa – Concerns Beneficiators not allowed to sell/export rough (Section 40 permit) • The inability of any beneficiator to dispose of non economical rough/ fragments or any other non suitable goods will impair the beneficiator financially and unfairly disadvantage it. • The government should not put the industry at such a disadvantage to its international competitors. • Currently s40 permits are controlled & issued by the Diamond Board & we suggest that the new regulator should have the similar powers to control this matter.

  12. South Africa – Concerns Funding of and Representation of State Diamond Trader (Section 17) • No information with regards to the proposed regulations of the State Diamond Trader is available • The possibility of private funding & combined with board representation may lead to a conflict of interest • The funding of the State Diamond Trader should remain with government

  13. South Africa – Concerns Other Issues It is crucial for an industry to have a consistent suitable supply of rough in order to be sustainable and grow. Non South African Goods The bill should address the issue of Export Duty on Non SA goods It is silent at present

  14. South Africa Thank you