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2022/3 Chairmans Report

2022/3 Chairmans Report


It is indeed an honour and pleasure to report on the SADPO activities of the past year. I want to thank everyone for affording me this privilege. Given the current situation, with specific reference to the diamond market, our industry is under immense financial pressure, and to top it all, it is but one of many reasons contributing to the disastrous state of affairs our membership is facing in order to survive. I compare this with the situation during the COVID19 pandemic, but without the mitigating and supporting measures that was available then. History however has proven, that the diamond market corrects itself, but this time we need to do everything in our power to overcome this situation in order to survive until then. Sadly, I have to report that a number of operations have already closed down based on the fact that they could not survive financially, and the subsequent loss of job opportunities, is something that our country can ill afford.
The report year has been very busy and eventful, and it is a challenge to highlight some of the more important activities, but I am going to attempt to single out some that had relevant bearing on our side of the industry. In general, I mourn the passing of members and/or their loved ones during the past year, and also the fatalities that occurred in the diamond producing sphere, albeit that it happened where illegal mining takes place, and hence there is no health and safety control.


The Kimberley International Diamond Symposium was successfully hosted by SADPO in collaboration with the GSSA. Despite the absence of leading officials from the DMRE and the SADPMR, due to the dates of the Symposium that coincided with the BRICS summit that was hosted by South Africa this year, and hence them not being able to attend the Symposium, I humbly think it was a huge success. The interest was overwhelming, and we had to close off registration about two weeks prior to the commencement of the Symposium, due to our venue not being able to accommodate bigger numbers. I want to take this opportunity to first of all thank our sponsors. Through their support we were able to sponsor the registration of a significant number of students from universities all over South Africa as well as Venda. Secondly thank you to each and every delegate that registered as well as all the speakers that treated us with their expert incite in the various facets of the diamond industry as a whole. Beside the Symposium itself, the evening events as well as the field trips lent itself to networking as well as a better understanding of the history of diamonds in our country and the unique mining methods, especially those that our side of the diamond producing industry, is utilising. The Symposium had a true international flavour, having high profile speakers from abroad, as well as the Executive Chaiman of De Beers Consolidated Mining (one of the world’s major players in the diamond industry) to name but a few. Lastly also a big thank you to the organizing team that put in many hours of hard work to make it the success it was. Almost without exception all the positive feedback was ended by the question – when will the next Symposium take place? This stands testimony to the success and something I as chairman is humbly proud of!

As was reported last year SADPO is still involved, as an organization, as well as through the MINCOSA, to contribute to the process of transforming the DMRE policy document on ASM into legislation that would be practical and user friendly, not only for the producers, but also for possible investors, that will be an essential element of this sphere of the small diamond producing industry. It remains a work in progress. I can confirm that SADPO is also trying to identify the proverbial low hanging fruit that might help to expedite the time-consuming legislative process, and at the same time help to speed up the formalization of this side of the industry. Equal to this we also want to get a recognized definition for these so-called smaller operations, and would probably include our current membership, since the Department of Labour defines any business employing less than 50 people, as a micro enterprise. The proposed legislation will definitely address more practical MH&S regulations, in order to lessen the cost of compliance for the small operation, while at the same time stimulate the creation of more job opportunities – something our country is in dire need of. It will also improve our financial viability and lower the high-risk factor we have to deal with while making it more attractive for investors to come on board. In this regard it is interesting to see that the policy document talks about allowing the two new license types to be encumbered, something the old Mining Permit did not allow. It must be noted that this process is contributing to the SADPO expenses, but its potential outcome will warrant the costs we spend in this regard.

Despite the above, SADPO is very much involved by invitation, in Government’s intention to amend the MPRDA as well as the current Diamond Act. It is our intention to make sure that an amended MPRDA is accommodative of the legislation that might follow the policy document. At the same time this would also apply to the Diamond Act, which mainly deals with the downstream side of our production, (marketing, cutting, and polishing) including the SDT and the SADPMR. Where possible SADPO relies on the MINCOSA to deal with these rather complex legal issues, but sometimes we have to look at it from our personal perspective, (the result of our small-scale mining methods that are unique) and this adds to our normal expenses. It is my humble opinion however that we cannot afford to ignore it and albeit trying to minimize the costs, it is money we have to spend to make sure that we as an industry survive in the medium and long term. It must be noted that it is time consuming and pressurizes our diaries.

Another issue SADPO is dealing with and is attending to, is water use licenses. Apart from the long waiting periods for the issuing of the water use licenses, we also have to deal with the billing for water use. Through SADPO’s intervention, an amount of over R15 million was written back in the report year, something we are humbly proud of, but there are numerous remaining issues that we try to deal with. Despite DWAF’s recognition of us representing our side of the industry, it is sad to report that their reaction time to our queries leaves a lot to be desired. Like all Governmental Departments they are struggling with high percentage of employee turnaround and hence have capacity constraints. We are however not giving up and remain vigilant in our approach to solve all issues.
The early promulgation of Reg 8.10 of the MH&S Act in December 2022 caught the mining industry as a whole by surprise. More so the SADPO members, mainly due to the Inspectorate of, in particular the Northern Cape and North West provinces, applying the said regulation to the letter, and is leading to numerous unnecessary and time-consuming presentations which nrrf to be made to the inspectorate. Again, SADPO has engaged with the Inspectorate but for now has not been able to convince them of our interpretation of the said regulation. We remain however adamant that, based on legal opinion, the said regulation is not applicable to us, and we are still in the process of addressing this important issue. It must be emphasized that we do not want to jeopardize the health and safety of anyone in and around our operations, but that all interventions should be risk based. SADPO will not rest until this matter has been settled and want to report to our membership that it is high on our priority list, and would do whatever it takes, since it is based on legal opinion.

In summary the abovementioned is but a small part of our activities and we are involved in all aspects of the industry where we serve on various committees and bodies, to name but a few, the DLF, JEMLF, ALF, NCMLF, CRG, Taxation committee, Law Advisory committee, MRAC committees of the MH&S Council, WIM, Tripartheid committees of the Northern Cape and North West provinces, the West Coast Grouping, as well as the NCMMA. All of these to serve our membership in accordance with the SADPO Constitution, as well as in line with our mission, vision and strategy. To report on all is just not possible due to time constraints. I am however available to any of our members to report on these if there is a need, and they are welcome to contact me in person.

Our financial position has deteriorated significantly. As you would see from our financial statements, the small profit that was shown last year, has turned into a significant loss. Despite the fact that we budgeted for a loss, it remains a huge concern to me that the contribution from our members have decreased alarmingly. The current market conditions are contributing to this state of affairs, but it remains my opinion that our members are not contributing fairly. There are many reasons offered in this regard, but not all of them are valid in my opinion. Firstly, our members are asking what did SADPO to benefit me, as member, personally. The question is valid, but not always easy to answer. I can however report that in this current financial year the savings SADPO in some cases directly, and others indirectly contributed through its intervention, will if added together exceed R20 million. These savings are attributed to water use bills, dynamic brake testing as well as savings through the export process. The last having an indirect influence to most members, but I can assure you that the buyers that export calculate the costs and this in turn influenced the prices we receive. This is tangible, and the rest of our efforts might only bear fruit in the medium to long term. So, in one financial year we helped creating a saving to the industry we represent almost equal to the total of the membership contributions SADPO has received since its inception more than 20 years ago. In my book it is not fair. We have loyal members that are doing more than their part, but there are people looking in from the outside that are eagerly sharing the benefits without contributing themselves. SADPO is more than willing to receive suggestions on how to turn this situation around, and if there is anything that we do wrong feel free to communicate it to me in person, and if there is merit, we will certainly rectify it. Our organization has made massive strides in obtaining the recognition we deserve, and is treated as such in the industry at large, including Governing bodies, but sadly our own people are not seeing what they see. I know that I am probably preaching to the proverbial converted, but each and every one of us has a duty in this regard. I again avail myself to all in this regard and confirm that this can’t go on indefinitely. So please, I am pleading, let us all take hands and turn this ship around.


Allow me to take this opportunity to thank our loyal members for supporting us. This organization is after all about you, and my gratitude comes from the bottom of my heart. I also want to thank the SADPO National Committee. They are sacrificing their valuable time to serve our members and our beloved organization, at zero remuneration. It is highly appreciated. Then closer to home, and here I am mentioning names, my EXCOM. Amo, despite your schedule you are always available to do your part. Thank you. Then Dougie our treasurer, I recognize the fact that you are not billing us according to the hours you put in. Thank you for making yourself available, often after hours, and thank you for your expert inputs. Lyndon my vice chairman, it sometimes amazes me how you are keeping all the balls in the air. Thank you for your support and integrity, and always giving a straight answer, knowing you have the interest of the organization at heart. It is appreciated, thank you. Then to our CEO Yamkela. You are worth more than your weight in gold (or should I say D colour diamond). I want our membership to know that you are sacrificing a lot of your precious time for the sake of our organization. I am saluting you and want to emphasize that I am also learning from you and also acknowledge that, for most of the year, at zero remuneration. You are a true leader and we as a SADPO family are privileged to have you onboard helping me steer this ship. Without you it would have been almost impossible – thank you. Then to our Secretary Rosalind, it has been a journey that, more often than not, where I thought myself lucky to have such competence with me on the team. You are truly my left and right hand and words are coming short to convey my appreciation, especially this year through very trying personal circumstances. I salute you! Lastly, I want to thank my Heavenly Father that supported me in person this year. I have experienced a couple of times only one track of footprints in the sand, only to realize it was the times you carried me!
I thank you.

GS van Niekerk

Rosalind Hansen