Jewels in the crown

South Africa is considered to be an economic powerhouse in the African continent by virtue of its membership in the 13-nation Southern African Development Community.

The country is very strong in mining and the gems and jewellery industry forms a major part of its economy.
South Africa has always been one of the biggest producers of raw material for gems and jewellery worldwide.

"Being the world's largest supplier of platinum and a significant supplier of gold and diamonds, we have always played a significant role in the world's jewellery market.

With the beneficiation drive initiated through our President Thabo Mbeke and Deputy President Phuzile Mlambo-Nguka, South Africa is gearing up to be a much more significant player in the global beneficiated product industry.

"In our current status, we only supply about one per cent of the global jewellery demand, but our target is to increase this to at least three per cent by 2015," says Lorna Lloyd, COO, Jewellery Council of South Africa.

The Jewellery Council of South Africa is the umbrella body of jewellery industry and is made up of three constituent bodies, each representing a different facet of the industry: the Jewellery Manufacturers' Association of SA, representing manufacturing jewellers; the Jewellery and Watch Distributors Association, representing wholesale jewellers and importers; and the Jewellers Association of South Africa, representing retail jewellers.

There are about 3,000 retail jewellery stores in South Africa, of which approximately one third are represented by the Jewellers Association of South Africa (JASA).

Fine jewellery

"South Africa has a large, nine-carat gold consumer market. There is also a very strong market for top-end, hand-crafted pieces made from both 18-carat yellow and white gold
as well as platinum jewellery.

Jasa plays an active role in representing the interests of the retail jewellers on a broad range of issues.

It aggressively promotes the awareness and sale of fine jewellery in South Africa and is also responsible for the creation and development of training programmes designed to enhance the professionalism of the trade on all levels.

Furthermore, Jasa provides an important interface between retail jewellers and the consumer through the provision of information and the resolution of differences that may arise in the course of trade," says Lloyd.Jewellery manufacturing destination

The latest legislated environment is becoming more conducive to foreign direct investment of jewellery companies operating outside of South Africa and with preferential supply agreements to countries such as the US, South Africa is fast becoming a more attractive jewellery manufacturing destination.

Though South Africa is very strong in mining, the processing of diamonds and the value addition to the final product needs to be strengthened with the right kind of training and education for the workforce in areas related to cutting and polishing.

Develop Africa was started in 2006 by the Dubai Diamond Exchange (DDE) in association with the Dubai-based International Gemological Institute (IGI). It is a training programme for diamond professionals from African diamond-producing countries.

IGI is the first gemological institute offering a practical rough diamond grading course such as Develop Africa. "We will improve the course further and hope that our training helps diamond-producing countries to maximise the benefits from their natural resources and enable them to use the revenue generated from the diamond trade to support their country's development.

We are keen to make this training an ongoing initiative so that it reaches more diamond professionals across the globe," says Noora Jamsheer, Chief Executive Officer, DDE.

"The exposure to a global diamond trading centre like Dubai and the extensive training that we received in the grading and identification of rough and polished diamonds will enable
us to break the myth about diamond pricing in our home countries.

The clear understanding we now have of the link between rough and polished diamonds in the value chain will enable us to implement better pricing strategies," says Henry Osei,
a metallurgist with the state-owned Precision Metals Marketing Company, Ghana, and a participant in Develop Africa 2007.

Significant supply

South Africa produces around 11.6 per cent
of the world's diamonds or $1.4 billion per year, with De Beers as the major producer. "South Africa has a significant cutting centre for turning rough diamonds into polished gems.

An industry that employs over 2,000 people, cutting around $600 million (about Dh2,203 million) worth of diamonds each year," says Stephen Lussier, Executive Director, De Beers Group.

Diamonds in Dubai
According to Lussier, the Gulf region and especially the UAE is a growth region for diamonds.

"Dubai is an emerging trading centre for rough and polished diamonds. The GCC made up about 7.5 per cent of world demand in 2006. We estimate that Saudi Arabia is the fifth largest consumer market for diamond jewellery in the world," he says.

The De Beers Diamond Jewellery group is the retail arm of the De Beers Group and was created in 2001 in London in partnership between De Beers Mining Group and Moet Hennessy Louis Vuitton (LVMH). "Our stores are the only place where the name De Beers is used for the consumer.

We opened in the region in April 2006 with our first store in the Mall of Emirates, and are in the process of opening in Riyadh, Jeddah, Bahrain and Istanbul over the next three months. Our objective is to have
10 to 12 stores in the Middle East in the near future," says Philippe McGarry, Director,
De Beers Diamond Jewellery Group. n

"2007 was
a year of record growth for the UAE diamond trade, which crossed the $10 billion mark. Dubai's total diamond trade increased by 53 per cent in 2007 to reach $11.23 billion."

Peter Meeus
Executive Director —
Diamonds, Dubai Multi Commodities Centre