Johannesburg - The SA Diamond and Precious Metals Regulator has allayed the jewellery industry's fears that operators might be denied new licences for not complying with the mining charter's black empowerment requirements.
The regulator said each application would be adjudicated on its own merits.
The news comes amid claims that the jewellery industry is in crisis, with a reported 30 percent drop in Christmas sales.
The regulator said it "will exercise flexibility in considering broad-based socioeconomic empowerment requirements".
Holders of licences must apply for new permits by June 30.
Previously, permit holders had to renew their validity every year, but the new licences will be valid for five years.
The jewellery industry had been worried that the renewal of jeweller's licences would be conditional on compliance with the black economic empowerment (BEE) requirements of the mining charter.
The regulator had originally said an application would not be considered if it did not address certain empowerment principles in the charter, which requires 26 percent black ownership within 10 years.
Many jewellers are small-time traders and are worried that they may fall foul of the BEE ownership requirements.
So sensitive is the issue that the chief executive of the Jewellery Council of SA, Lourens Marë, refused to comment.
The council has three constituents - wholesalers, manufacturers and retail jewellers. It has issued a guideline to assist members in applying for the new jeweller's licences.
Chris van Rensburg, the chairman of the council and owner of Studio Manufacturing Jewellers in Johannesburg, said his company's policy was in favour of transformation. It was making progress on the other elements of the mining charter, except on ownership.
He felt the requirement on black ownership was unrealistic: "I employ 30 people, but to apply the charter under black ownership is totally impossible.
"My revenue is less than R100 000 while the company is valued at about R10 million. It would be impossible for me to find a black investor."
He said the council had proposed that a BEE partner should not be a prerequisite to granting a licence. The regulator had accepted this as an internal guideline.
He added that the council's research had found that the jewellery industry was marginal or nearly marginal, and "facing the financial crisis makes it even more bleak".
Ian Furman, the owner of Jewellery Replacement Consultants in Johannesburg, said the jewellery industry was in crisis and suffered a 30 percent drop in Christmas sales.
Diamond prices had dropped by up to 30 percent, he said. "Theoretically, there has never been a better time to buy, but very few are buying."
This week Paul Loudon, the chief executive of London-listed DiamondCorp, said the global economic downturn had caused prices for diamonds received from its Lace mine in the Free State to fall 50 percent in the fourth quarter of last year.
Posted to the web on 01, Feb 2009 by Business Report
