Can you give an overview of SADPO and the organization’s history in the South African mining industry?

SADPO was founded in 2001 and is a representative body to speak on behalf of the smaller side of the diamond-producing industry of South Africa to streamline the sector. We are registered as a non-profit organization governed by its constitution. Our membership consists of approximately 85% of all current small-scale diamond miners in South Africa and includes the complete spectrum of truly artisanal miners to junior miners. The majority of our membership are alluvial miners, which include marine miners, but we also represent some of the smaller kimberlite mines.

The value of small-scale diamond mining production is approximately 25% of the entire South African production value, proving that we produce diamonds of exceptional quality that significantly contribute to foreign exchange earnings and taxes throughout the whole spectrum.

To what extent has the diamond market recovered from the pandemic?

Pandemic had a detrimental impact on the small diamond mining industry. Our side of the industry has been financially marginal, even pre-Covid, and we had to adapt to a new normal, bringing with it even more unintended costs to adhere to relevant protocols. It is something we are taking on the chin since the health and safety of everybody in and around our operations are non-negotiable and of paramount importance to us.

The diamond market initially witnessed severe losses as the pandemic disrupted sources of income for diamond mining. The devastation was felt across the whole supply chain. We were forced to start producing to retain our employees. Luckily, the resilience of the diamond market has proven itself once again and has recovered to levels higher than pre-Covid.

How would you describe the exploration climate for diamonds in South Africa, and what is causing the decline in alluvial diamond mining?

The only way to truly determine if a project would be viable is through bulk sampling. Approximately 50% of our members are operating under exploration licences. The main reason for the decrease in alluvial diamond mining revolves around the regulatory framework in South Africa, which I believe is tailored for large-scale mining instead of small-scale miners. The framework has a one-size-fits-all approach and leads to unnecessary operating expenses, negatively impacting our already strained financial viability. The framework has also contributed to significantly decreasing the possibility of foreign investment into small mining companies. SADPO fully supports the regulatory framework’s intentions but is convinced that the same can be achieved by simpler, more user-friendly, and more practically implementable regulations.

In May 2021, the Department of Mineral Resources and Energy (DMRE) published a draft artisanal and small-scale mining policy document for public comment. SADPO was invited to take part in discussions before publication. The draft policy acknowledges certain shortcomings in the legislative and regulatory framework for specifically the small and artisanal miners. This is a massive step in the right direction, and SADPO is looking forward to what the new policy will look like and how it will formalize currently illegal mining.

We are convinced that due to our unique methods of mining, which are unlike other commodities and the policy must be commodity-specific for the diamond industry, addressing our specific needs.

Turnaround times for all licence applications should shorten drastically and should not take longer than 30 days for artisanal mining and 60 days for small-scale mining. Applications for an artisanal licence should not exceed R2,500 and R5,000 for a small-scale licence, and only nominal rehabilitation bonds should be applicable in both cases. Water use licences should only be applicable to small scale mining licences, with artisanal miners being able to operate without water licences as they are not using water at all. Artisanal mining and small-scale mining should be clearly defined and regulated in terms of employment and equipment usage.

What would you suggest to turn around the dwindling numbers of the small-scale diamond miners, with specific reference to financing?

SADPO is suggesting that artisanal and small-scale diamond miners are exempted from the current royalty act and should only be responsible for a royalty of 2% on gross sales is convinced that, if our suggested policy changes are incorporated into the new legislation, this side of the diamond industry can grow back to its former heyday in the late 1990s and consequently create the much needed job opportunities in the rural areas of our country.