Hon Chairperson, Minister Shabangu, Ministers and Deputy Ministers present, hon members, leaders of the trade union movement, leaders of the business community, ladies and gentlemen, and comrades and friends, it is amazing how time flies, and perhaps the Nobel Laureate for Literature, Nadine Gordimer, is correct in observing that:
Time is change; we measure its passing by how much things alter.
It has been a remarkable seven months since I was deployed by the President of our movement, the ANC, to this critically important portfolio of Mineral Resources. I would like to express my gratitude to these two great institutions for having confidence in my ability to discharge these responsibilities.
In the Department of Mineral Resources, DMR, I have joined a team of dedicated professionals who go about executing their tasks with the diligence and fortitude that the demands of our time impose on them. It is perhaps what Ayi Kwei Armah had in mind when he wrote in The Beautyful Ones Are Not Yet Born, and I quote:
Alone, I am nothing. I have nothing. We have power. But we will never know it; we will never see it work. Unless we choose to come together to make it work.
I have also been humbled and impressed by the warmth with which I have been received in the department, which can only bode well for the successful execution of our mandate and urgent tasks. In this regard I want to thank the Minister for her leadership and guidance during this exciting period. To the Director-General, Adv Sandile Nogxina, thank you, Mdengentonga, for your support. Give him a big hand. [Applause.]
Let me take this opportunity to welcome two comrades, Duma Nkosi and Solomon Mandla Rasmeni, to the offices of the director-general and the Deputy Minister respectively. These two servants of the people were right here in Parliament during the period of the drafting of the Mineral and Petroleum Resources Development Act, MPRDA. I have no doubt that they will add a lot of value to our work as a department. They will be right in the thick of things as they serve as a nexus between the legislature, the executive and the department.
It is in the context of the recognition of our achievements that we have invited two erstwhile leaders, doyens, of the trade union movement, Comrades Cyril Ramaphosa and James Motlatsi, to attend today's Budget Vote debate. These stalwarts were founder members of the National Union of Mineworkers, NUM. Through this gesture we are honouring their role and contribution to the achievements of our democratic mining jurisprudence. [Applause.]
As we start this month, we must reflect on our programmes that are intended to support young people, and assess how far we have gone in implementing the vision of the Freedom Charter. As the mining industry it is our duty to ensure that we do not fail these young people, and we see to it that the 1,5 million of them who started Grade 1 this year finish Grade 12 without disappearing from the system.
Last week we were told that a huge number of those who walk the streets looking for work are youth between the ages of 16 and 35. This is a call to action for us who went through the June 1976 struggle to do our utmost to honour the youth through providing them with opportunities for decent work.
As we meet today, we are a mere month away from July 18 and from celebrating our international icon, former President Nelson Mandela, who, very much like former ANC President Oliver Tambo, is the unifier of the nation and the organiser of victory. Former President Mandela, a former mineworker, was in fact elected in 1989 as the honorary life president of the National Union of Mineworkers.
The mining industry will therefore need to play its part in keeping the activities in line with the noble values of sacrifice and selflessness that Madiba has come to symbolise. Nelson Mandela's name should ordinarily be appropriated by, among others, the democratic trade union movement and progressive forces that have at their frontline cadres who share his values.
I believe there is no better tribute we can pay to Nelson Mandela than to get the mineworkers and mine bosses to work together to improve the living conditions of people within and outside of this industry. We will wait for the instructions of president Zokwana of the NUM and the general secretary, Mr Baleni.
In 2007 this House, Parliament, resolved that the living conditions of mineworkers should be investigated and improved, that we should support the initiatives of the NUM in building a workers' museum, and that this democratic Parliament should give consideration to naming some of its buildings after J B Marks, the leader of the African Mineworkers' Union. We are called upon to see to the implementation of this resolution.
When we visited India recently, we were reminded by one of the Cabinet Ministers from the Silicon Valley who said, and I quote:
It is indeed an honour and a privilege to live during the same time as Nelson Mandela, the greatest revolutionary of our time.
We salute you, stalwart, Isithwalandwe, Seaparankoe. Re a leboga. [Thank you.]
The Minister has already outlined the budget that has been allocated to the department, and after all budgets are but a numerical expression of policy. The Minister's budget statement represents a programme of the ANC-led government to use the vast mineral resources of our country to contribute to the overall objective of lifting our people out of the grinding poverty and underdevelopment that currently afflicts them.
The Minister has requested me to deal extensively with the diamond industry, and I see that our hon members are also interested to know what we are doing to revitalise the diamond industry for growth and job creation. Listen and learn.
As instructed by President Zuma in his state of the nation address, it is our belief that we can use the possibilities offered by the diamond industry to meet the twin imperatives of job creation and economic growth.
South Africa is one of the few countries in the world that are involved in the entire spectrum of the diamond value chain, which includes exploration, mining, rough and polished diamond trading, cutting and polishing, jewellery manufacturing and ultimately retail. This is understandable, as South Africa is a major diamond producer and ranks sixth in the world with regard to volume, that is carats, and fourth with regard to value.
It is, however, worrying that we remain a small player in the downstream sector of the diamond value chain, with a disproportionately small and underdeveloped beneficiation industry. The situation has been further exacerbated by the impact of the recent global recession, which has forced small businesses, particularly the small businesses involved in rough and polished diamond trading, and cutting and polishing, as well as jewellery manufacturing, either to close shop or reduce production substantially. As a result, thousands of people have lost their jobs.
However, the 2011 outlook for the diamond industry is very positive, and we have witnessed a strong recovery in rough diamond prices and demand. This bodes well for the downstream diamond beneficiation industry. We produce enough diamonds to satisfy the demand for our downstream diamond beneficiation industry. Other diamond cutting and polishing centres around the world, like India, Belgium and Israel, continue to thrive, partly due to their dependence on diamond supplies from South Africa.
The country's diamond beneficiation industry remains significantly small and its development has an immense potential to stimulate further economic activities and to create thousands of new jobs. It is precisely for this reason that we have, through consultation with the diamond producers, the diamond task team of the Chamber of Mines, the State Diamond Trader, the SA Diamond and Precious Metals Regulator, the United Diamond Association of South Africa and others, sought to gain a better understanding of the factors that have constrained the sustainable development of our country's diamond beneficiation industry.
The findings of our consultative engagements have revealed that there are four broad categories of challenges that need to be addressed systematically in order to reposition and revitalise our downstream diamond beneficiation industry for sustainable growth and development. Briefly, these challenges are the following.
Firstly, the challenge is the lack of access to finance. Diamond beneficiation is a capital-intensive industry that requires funding, particularly for small players. This is so because of the costly nature of the industry's raw materials and equipment, and the time-honoured persistence by the main rough diamond producers in having their clients pay cash on, or even before, delivery. As a result, no substantial trading and cutting business can flourish without a supportive banking environment. Lack of capital prohibits business growth and access to modern technology.
In South Africa, only two commercial banks, namely Nedbank and ABN Amro, are currently providing funding for the sector and mainly focus on preferred clients or sightholders of the Diamond Trading Company, DTC, which are normally large established companies. The local small and medium- sized manufacturers have no or very limited access to sources of finance. The Industrial Development Corporation, IDC, has provided funding to some companies in the sector. However, the majority of beneficiating entities do not have access to funding.
We are currently studying different diamond funding models, like the Antwerp Diamond Bank, Israeli banks and the State Bank of India, in order to propose to local financial institutions, and especially the IDC, that they consider developing a South African diamond funding model to support our local beneficiation industry. Oh, my time is flying!
There are other issues concerning the skills shortage and lack of markets that I wanted to deal with here. However, I will not have the time to do that.
I thought I would also speak about the security of supply. Regarding security of supply, I would like to express our gratitude to the Chamber diamond task team and the DMR which, when it was approached to provide short-term relief in the plight of small cutters and polishers, rose to the challenge and made certain carats available for cutting and polishing. This gesture of goodwill is appreciated and indeed demonstrates the mature relationship that we have in this sector. We will work towards importing diamonds from Angola, Zimbabwe and the Democratic Republic of the Congo,