40 / 90
37
This is one of the main reasons why the governments
of southern African countries, for example, have been
keen to ensure their countries expand along the value
chain to sectors that create more jobs, such as cutting
and polishing.
At the same time as creating local jobs, beneficiation
policies create a challenge. Lower worker productivity
means that cutting costs are higher in southern Africa
than in countries such as India, and so the move
towards local cutting increases costs and reduces the
profit pool that can be shared between producers and
governments (see Fig. 19).
In order for local beneficiation to be sustainable in the
long term, producing countries will need to make an
effort to develop competitive downstream industries
that can create value as well as generate jobs.
This will require investment in skills development and
infrastructure as well as thoughtful regulation. Only in
this way can the downstream diamond industry ensure
long-term job creation that will attract investors and
developers to the sector.
APPROXIMATE TOTAL
CUTTING AND POLISHING JOBS
APPROXIMATE CUTTING AND
POLISHING COSTUSD/CARAT
i
Producer countries are gaining share on
the back of government policy, despite
higher costs than traditional
manufacturing locations
‘Old’ cutting locations have lost share of
manufacturing following migration first to
low-cost locations and subsequently to
producer countries
The trend of growth in low-cost locations
has recently started to reverse
2008
CUTTING CENTRE
Canada
300
50-80
0 NW
180 Ontario
25
2,200
3,750
60-120
45->125
Botswana
1,000
150-200
150+
120
Belgium
1,000
1,800
130-150
60-100
South Africa
2,000
400
140->300
47->55
Israel
29,000
10,000
20-50
15-35
Far East
850,000 800,000
10-50
6-50
India
2013
2008
2013
,500
5 > 25
Namibia
970
1
60-140
4 - 1
US
80-100
100
300
110
Source: De Beers estimates
i
These are estimates for the majority of production units and exclude outliers
FIG. 19:
CONSENSUS VIEW OF CUTTING AND POLISHING COSTS AND
EMPLOYMENT IN CUTTING CENTRES