Lyndon de Meillon reports significant decline in South Africa's small-scale and junior diamond mining sector
South Africa's small-scale and junior diamond mining sector has shrunk from approximately 2,000 active companies to about 20 over the last two decades. Lyndon de Meillon, owner of Paleostone Mining, attributes this decline to several regulatory and economic factors, including the 2004 Mineral and Petroleum Resources Development Act and the lack of financial support for black economic empowerment equity requirements.
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De Meillon noted that while alluvial mining accounts for only 4% to 5% of the country's diamond output by carat weight, it contributes roughly 25% of the industry's annual value due to its higher proportion of gem-quality stones. However, the sector has faced pressure from rising costs in electricity, water, fuel, and labor, alongside the 2007-08 global financial crisis. De Meillon stated that a small group of well-capitalized companies is currently acquiring mining rights and rough-diamond stocks from distressed producers. He predicted that larger and fancy-colored stones will likely see price gains, while smaller stones will continue to face pressure from lab-grown competition.
Sources
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South Africa's Junior Diamond Miners Shrink to 20 Firms, Squeezing Rough Supply
diamondworld.net
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South Africa’s small-scale, junior diamond sector faced with many headwinds
Mining Weekly