Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Gold/Mining/Energy : SOUTHERNERA (t.SUF) -- Ignore unavailable to you. Want to Upgrade?

To: Andrew who wrote (5704)	2/17/2000 2:36:00 PM
From: PHILLIP FLOTOW	Read Replies (1) \| Respond to of 7235

Law may change duty on diamonds Business Day (Johannesburg) February 17, 2000 By Linda Ensor Cape Town - New legislation to replace the Diamonds Act would involve a complete review of the ineffective system of export duty exemptions for diamond producers, minerals development deputy director-general Jan Bredell said yesterday. The department believes that the section 59 agreements with diamond producers have not been effective in promoting a local industry. In terms of these agreements producers get exemptions from the 15% export duty on rough diamonds in return for making a sufficient quantity available to the local market for cutting and polishing. Bredell said the chapter of the Minerals Development Bill, which would replace the Diamond Act, was being drafted. It was therefore too soon to say that section 59 would be abolished. It might be that its implementation was made more effective. However, De Beers spokesman Tracy Peterson said the corporation could not consider the financial effect of the changes to the legislation until their full implications had become clear. Abolition of the exemptions altogether would have a serious impact on De Beers's marginal mines. De Beers believes the SA cutting industry is competitive only in the larger, higher-value diamonds. Yesterday Diamond Board CEO Victor Sibiya called the section 59 agreements a complete farce. They had proved a "devastating cost" to the economy. He called for their immediate cancellation, saying an export duty was essential to expand cutting and other value-added activities in SA. "The acute lack of verification in all critical monitoring areas has meant that these agreements have not delivered what is said on paper," Sibiya told Parliament's minerals and energy portfolio committee. Full data had to be made available. The fiscus received inadequate financial returns as manipulations and undervaluations were possible. Sibiya said investment growth in the manufacturing sector had been constrained by "rigid, rough, export-focused corporate ideologies". He also believed that the composition of the Diamond Board was "highly dysfunctional" as it contained an inherent conflict of interests. The board represents government, the regulating authority and the private sector. This was a recipe for conflict and had hindered the implementation of new ideas. The board was not performing more than 10% of its statutory mandate and could not operate effectively without regional representation. The urgently required solution, Sibiya said, was to create a regulatory board answerable exclusively to the state. The board was "overly inclined to direct and indirect De Beers domination." The fact that the board was almost entirely (about 90%) funded by levies on De Beers exports also opened the way for abuse. Sibiya said De Beers's payments of levies was used "with apparent intent to secure or induce compliant behaviour". PHIL