2024/2025 Chairman’s Report

INTRODUCTION

It is my honour and privilege to report to members on SADPO’s activities over the past financial year and into 2025. Our sector continues to face unprecedented challenges, many beyond our control, yet the resilience and commitment of our members remain commendable. This report provides an overview of key events, advocacy, industry challenges, and the strategic direction ahead.

 

CIRCUMSTANCES BEYOND OUR CONTROL

The past year saw continued political and economic uncertainty in South Africa, including the transitional Government of National Unity following the 2024 elections. Policy certainty remains critical for investor confidence, and our lack of alternative financing options heightens our dependence on external investors.

International conflicts and geopolitical sanctions, especially involving Russian diamonds in G7 countries, have disrupted global markets, intensifying market uncertainty and pressure on diamond prices. The rise in lab-grown diamond production further complicates this landscape. Over the past few months, significant media coverage has focused on the decline in lab-grown diamond prices. This trend could be interpreted as a positive development for consumers or as a factor that may impact the market dynamics for natural diamonds.  The USA’s import tariffs added to the frustration of uncertainty in terms of how the market will react. On the regulatory front, the introduction of origin authentication requirements beyond the Kimberley Process increases marketing costs and compliance burdens.

 

SADPO ACTIVITIES & ENGAGEMENT

Throughout the year, SADPO amplified its representation through active engagement with government departments including the DMPR and participated in numerous stakeholder forums to safeguard members’ interests.

Highlights of the year, outlining the most important engagements, though not all are included:

• SADPO was invited to the DOHA International Diamond and Gem Conference, which was attended on our behalf by CEO Yamkela Makupula and National Committee member Amo Marengwa in January. We were the only South African representatives at the event, and an article relating to it also appeared in an Italian magazine, Preziosa.
• I was not able to attend the Mining Indaba itself due to the high attendance fee, but I was able to meet with delegates from Antwerp and Tel Aviv outside the event to discuss investment opportunities in diamond mining. I also attended the State Diamond Trader platform, which ran concurrently with the Indaba, as well as a breakfast meeting that provided an opportunity to engage with fellow mining CEO’s.
• SADPO was invited by the GSSA to attend the Namaqualand Diamond Centenary Conference. I participated in a panel discussion, while our Vice Chair, Lyndon de Meillon, also took part in the field trips, which were all very informative.
• Errol Smart, formerly CEO of Orion Minerals, joined SADPO as a second Vice Chair. We are pleased to have him on board as an industry expert in junior mining.
• SADPO was invited to engage with the Department at ministerial level regarding the Draft Mineral Resources Development Bill of 2025, prior to its publication. The engagement, led by the Minister and the Director General of the DMPR, along with the relevant Deputy Director Generals, aimed to consult with the industry before the draft was released. Our comments and suggestions on the draft bill were submitted through the Minerals Council.
• SADPO’s financial position has been deteriorating in recent years, posing the organization’s biggest threat to survival. This could be rectified if all role players contributed equally alongside current supporters, restoring financial stability. We are humbled by donations received from within our membership, amounting to almost R750 000, which have had a positive impact on our very survival. While this is a significant contribution, it is by no means sufficient to sustain the business, and we urgently need all members to pull together to ensure SADPO’s continued existence for the medium and long term.
• Since the term of the current National Committee has expired at the end of October, looking at stabilizing our monthly income, should be an absolute priority to the incoming members serving on this Committee.
• SADPO hosted an Industry Stakeholder Meeting in July in response to the organization’s mentioned financial challenges and the need for the industry to present a united front. It was essential to bring stakeholders together to assess the relevance of our organization, particularly in light of upcoming changes in legislation, and to ensure we could voice our specific needs which is something that would be difficult on an individual basis, if not impossible. Without proper funding, we are unable to effectively carry out the duties we have committed to on behalf of our members. We acknowledge the extreme financial strain that all diamond producers are facing, but the meeting unanimously resolved that we must leave no stone unturned to keep the organization alive and functioning. This led to the establishment of a Strategy Committee consisting of: Gert van Niekerk, Errol Smart, Yamkela Makupula, Lyndon de Meillon and remains a work in progress.
• During the Diamond Leadership Forum, I pointed out that the G7 committee had visited neighbouring countries, but South Africa was not. I emphasized that we cannot be excluded from such an important matter. At that time, Botswana had already been approved as a G7 certification node, and Namibia was in the process.

Subsequently, we were invited to a discussion at the UN offices in Pretoria, along with the SADPMR, SDT, Petra, De Beers and Star Diamonds. It was an open and honest discussion. I highlighted that additional marketing costs could lead to the demise of the smaller side of the diamond-producing industry. Even though we represent only 3–5% of the carats mined in South Africa, the value equates to about 25–30% of the total, which came as a surprise to many.

They stressed that they are not political actors, merely government officials, and that the process also involves a political agreement. However, they foresee that once the political issues are addressed, there would be no problem for South Africa to become a G7 certification node. They requested that we provide a document outlining SADPO’s role in the industry, as well as the constraints, challenges, and difficulties faced by small diamond producers.  I am humbly proud to announce that SADPO provided them with the mentioned document and can confirm they acknowledged receipt.  SADPO remains cautiously optimistic that our unique circumstances will be taken into account going forward with this process.

• SADPO was invited by Minister Gwede Mantashe to attend a session at the office of the SADPMR in Johannesburg, where all diamond stakeholders in the industry were present. The discussion focused on the Luanda Accord, which stipulates that 1% of gross turnover from all producers be paid to the Natural Diamond Council for a global marketing campaign promoting natural diamonds.

While SADPO agrees with the importance of such a campaign, I highlighted that this contribution is not affordable for the smaller side of the industry I represent. Our 2nd Vice Chair, Errol Smart, suggested that the 1% be taken from the existing 3% royalty already paid to the state. It should be noted that De Beers and Ekapa agreed to pay the 1%, while Petra, Transhex and SADPO were not in favour of such a commitment.

Following the discussion, the Minister requested a quick meeting at a separate location outside the main session. It was agreed that the matter would be taken up further through the Diamond Leadership Forum of the Minerals Council. My concerns were subsequently substantiated by a formal letter to the Forum and our statements were also quoted in the press.  I am happy to report that there is a tiered contribution list on the table, which I actually proposed, and that it might be possible for certain members of SADPO to be exempted. Those members who are required to contribute might only be liable for 0.1% of revenue. This is, however, still a work in progress, which will hopefully be finalized by the end of November, but involves a direct meeting with the Minister himself.

• The amended Draft MPRD Bill was published at the end of May, with industry given until 13 August to submit comments and inputs. The official industry view is that the current draft is not investor-friendly and may not be conducive to economic growth in the country. Our 2nd Vice Chair, Errol Smart, has been elected to represent the junior mining sector in further discussions with the DMPR regarding the new Bill. He is part of a delegation of four, which a very small, focused group. SADPO is proud that one of our executives is playing such a vital role and we emphasize that this remains a work in progress. It can be reported that high level discussions around the contentious issues in the Bill are still taking place and we are cautiously optimistic that the final outcome might be better for the industry as a whole.
• Work with the Department of Water and Sanitation addressing water license invoicing issues, securing multi-million Rand reversals benefitting members. Sadly, I have to report that this also remains a work in progress and that despite always being friendly and open, the reaction is virtually non-existent.
• Through the Minerals Council of South Africa, SADPO as a fully affiliated member, is very active in various Leadership Forums and special Committees where there are also a number of successes reflecting the importance of collaborative action and also receiving the necessary attention to the unique circumstances of the smaller side of the industry.

 

FINANCIAL OVERVIEW

SADPO’s financial position continues to be challenging. I do not want to elaborate on this since the financial statements, as presented to you today, speaks for itself.  I can however confirm that the effort in collaboration with the mentioned Strategic Committee remains functional and is prioritized.

 

STRATEGY AND FORWARD PLANNING

The Strategy Committee has been instrumental in mapping a sustainable future for SADPO. Key initiatives include:

• Member and stakeholder engagement meetings, driving positive sentiment toward SADPO’s continuation.
• Targeted outreach to tender houses and Original Equipment Manufacturers to foster financial support.
• A succession plan focused on leadership continuity with a view to stabilise the organisation financially before transitioning key roles.
• Enhancing SADPO’s visibility through media engagement and proactive communication, especially around imminent legislative changes.

It has been confirmed that a new Diamond Act will be published in the near future and SADPO will play a significant role in the period for comments when this happens.  I want to emphasize that there is a number of Articles in the current legislation that can be amended, in my humble opinion, to be more user friendly and specifically accommodating our unique marketing process in a way that might increase the price of our product in South Africa as opposed to what is received outside our country.

 

Industry and Market Conditions

While diamond prices remain under pressure with ongoing market uncertainty, particularly from lab-grown alternatives, early signs of market stabilization are evident. SADPO’s active participation in international forums such as the Doha Diamond and Gem Conference highlighted South Africa’s resilience and potential for renewed investment, including diversification into by-products beyond diamonds.

 

Safety, Environmental, and Legal Developments

SADPO continues to address key operational challenges:

• Advocating against disproportionate mandatory training requirements and onerous safety regulations that disproportionately impact small producers.
• Monitoring evolving environmental legislation mandating costly compliance measures, including new levies on slimes dams and water use reporting.
• Supporting effective responses to the Mineral Resources Development Bill with an emphasis on fair empowerment provisions and reasonable penalties.
• Trying to address certain aspects of the Mine, Health and Safety Act, currently empowering discretional opinions of Health and Safety Officers opening up the opportunity to oppose their discretional understanding while inspections take place.

 

Acknowledgements

I extend heartfelt thanks to our loyal members who contribute time, expertise, and finances. Special appreciation to the National Committee, ExCom members, and the CEO for their unwavering dedication and personal sacrifices. Thanks also to our legal and financial advisors, industry partners, and government officials who engage constructively with SADPO’s objectives.

I cannot, but name a few;

Yamkela Makupula, that has served SADPO as CEO till the end of September 2025.  She has, despite serious health issues, always been willing to assist SADPO.  Her experience and personality as a high-level businesswoman, contributed to the wellbeing of the SADPO efforts and I want to personally thank and applaud her unselfish behaviour.  I truly commend you and feel a hearty thank you is not enough.

Rosalind Hansen, that departed at the end of April 2025, must be mentioned as well.  During her term she served SADPO with distinction and despite a number of personal challenges, did a wonderful job.  I salute you.

Lyndon de Meillon needs special mentioning.  Despite his full program, he is always willing to sacrifice some of his time in favour of SADPO and remains one of my sounding boards.  I truly appreciate you.

Dougie Hellmuth, our Treasurer, has an equal busy diary and is always accommodating SADPO and its needs.  Dougie to you, also a personal thank you.

Errol Smart has joined SADPO since April this year and it was decided by the Excom that he would serve as the Second Vice Chair.  Since his arrival, I must mention that his immense experience, leadership and drive, my own burden has become a lot more bearable.  Errol, I am thanking you for your guidance, wisdom and leadership in assisting me, steering this ship through troubled waters and I am actually at a loss of words on how to thank you.  Making a bold statement, it is my personal opinion that SADPO would not have been where we are today, without your contribution.  I also salute you.

Ronel Hamman has joined as on a contract basis since the departure of Rosalind Hansen.  Ronel, I truly want to thank you for all your help and input, boarding the ship at a very difficult time.  You have passed the test of time with flying colours and my appreciation is immense.

Mark Hunt remains one of the pillars of SADPO when it comes to Mine Health and Safety. His presence on ground level has transformed our industry in this regard and l want to thank him in person for his contribution in this regard.

Willie and Roelien Oosthuizen, thank you also for your extra efforts on the environment side as well as your personal promotion of SADPO. It is highly appreciated.

It must be mentioned that all of the above names contributed in their unique way without in some instances any renumeration and others at a discounted fee.  It shows that all of them have a passion for the industry we represent and from my side, remains indispensable.  A great thank you once again to all of you.

 

CONCLUSION

Despite the challenges we face, SADPO remains the indispensable voice and advocate for South Africa’s smaller diamond producers. Strengthening the organisation through member unity, financial sustainability, and strategic advocacy is essential to ensuring both our survival and future growth.

I urge all members to reflect on their role in this collective effort and to support SADPO actively.

Lastly, I want to thank my Heavenly Father for his grace and mercy, giving me the strength to fulfil my duty as Chairman and without which I would not have been able to do it.

I thank you.

 

GERT VAN NIEKERK

CHAIRMAN