Diamonds in South Africa losing their sparkle?

The diamond industry in South Africa, a key player in the global market, has a long history of contributing significantly to the country's economy. Over the past century, diamond mining has been a pillar of South Africa's GDP, providing employment opportunities and driving exports. However, in recent years, the industry has faced challenges such as declining natural resources, competition from synthetic diamonds, and increased participation by other diamond-producing countries. To delve deeper into the state of the diamond industry in South Africa, Nosi Mzamo, CEO of SA State Diamond Trader, joins CNBC Africa for a discussion. Looking at the economic impact of the diamond industry, Nosi highlights the evolution of the industry's contribution to the South African economy. She notes that while diamond mining has been a significant economic driver historically, the depletion of resources in traditional mines has led to the rise of new mining houses. The government has introduced diamond beneficiation initiatives to ensure a sustainable production chain, emphasizing the cutting and polishing of diamonds within the country. One of the key challenges facing the South African diamond industry is the growing popularity of synthetic diamonds. Nosi acknowledges that while the impact within South Africa is minimal, the international diamond market, particularly in the U.S., is seeing a shift towards lab-grown diamonds. To combat this trend, the SA State Diamond Trader is focusing on marketing the value of natural diamonds and educating consumers on the differences between natural and lab-grown stones. To maintain competitiveness in the global diamond market, South Africa is prioritizing diamond beneficiation and exploring new strategic initiatives. As the sixth-largest diamond-producing country, South Africa is leveraging its historical advantage by promoting local diamond shows and facilitating access to international markets. By showcasing South African diamonds that are cut and polished domestically, the industry aims to elevate the country's standing in the global market. In addition to local market initiatives, South Africa is also looking to strengthen intra-Africa trade relationships within the Southern African Development Community (SADC) region. By fostering partnerships with other African diamond-producing countries, South Africa aims to boost diamond beneficiation efforts and enhance trade opportunities within the continent. The country's participation in the Kimberley Process provides a platform for collaboration with other African nations in the diamond mining sector, further solidifying its position in the global market. As South Africa prepares to host the diamond show during the Mining Indaba in February 2025, the industry is gearing up to showcase its capabilities and drive growth in the diamond sector. By embracing new partnerships, strategic initiatives, and a renewed focus on local beneficiation, South Africa's diamond industry is poised to navigate the challenges of global competition and pave the way for sustainable growth.