Exclusive: Indian Diamond Companies helpless, forced to set up polishing units in Africa

Surat : In a bid to secure a consistent supply of high-quality rough diamonds, diamond companies from Surat and Mumbai, who are the sightholders of De Beers, find themselves under pressure from diamond mining companies in African countries.

These African entities, backed by their respective governments, are forcing the Indian diamond industry to establish cutting and polishing units within their territories. This development has left diamond company owners bewildered and concerned about the future of their operations in Surat, India.

The issue came to light during a meeting between Union Commerce Minister Piyush Goyal and diamond company owners in Surat. The interaction took place during Goyal’s visit to the city for the signing of a Memorandum of Understanding (MoU) for the PM MITRA park on Thursday. The owners expressed their dismay over the beneficiation policy adopted by African countries, which compels them to set up cutting and polishing units in order to create employment opportunities for local citizens.

The world’s largest diamond mining company, De Beers, recently inaugurated its Sightholders Sales facility in South Africa. This facility is part of the global sightholder sales network, which aims to sell rough diamonds for beneficiation purposes in South Africa, Botswana, Namibia, and Canada. Its primary objective is to support the sustainability of the diamond manufacturing industry through a beneficiation strategy aligned with the local objectives of the South African government.

The beneficiation strategy involves various activities designed to further the economic goals of South Africa. These include skills development, enterprise development, industry development, as well as marketing and promotion of the country’s diamond industry abroad. By supplying rough diamonds to South African sightholders, De Beers ensures a consistent and predictable flow of raw materials for the local cutting and polishing factories. Since 2020, this partnership has led to the employment of 620 cutters and polishers.

To support the objectives of the South African government, De Beers Group collaborated with key industry players, including the SA Diamond and Precious Metals Regulator, SA Diamond Manufacturers Association, SA Diamond Dealers Club, and the State Diamond Trader. Together, they launched the Small Beneficiator Customers pilot program last year, which provided assistance to seven identified cutting and polishing businesses.

However, the diamond company owners from Surat and Mumbai feel compelled to establish cutting and polishing units in African countries, particularly South Africa and Botswana. They perceive this as a result of pressure exerted by mining companies and governments in Africa to further their beneficiation initiatives and create employment for local citizens.

The diamond industry in Surat and Mumbai has been the backbone of India’s diamond trade, with the two cities serving as global centers for diamond cutting and polishing. The current development raises concerns about the potential impact on the Indian diamond industry, including the loss of jobs and the disruption of established supply chains.

The diamond industry, known for its intricate craftsmanship and contribution to the global luxury market, stands at a crossroads as it grapples with the challenges posed by changing dynamics and the evolving needs of various stakeholders.