RAPAPORT...
Abbey Chikane has left his position as chief executive officer of South Africa’s State Diamond Trader (SDT) after his contract expired at the end of August.
SDT chairperson Linda Makatini confirmed with Rapaport News that Chikane’s contract had ended and would not be renewed as it had been a 12-month fixed-term contract running through the provisional rights period in which the trader could operate.
The SDT board now awaits approval from the Treasury to continue to operate as an entity, at which point a new CEO will be appointed. Makatini could not say when that approval would be passed but added that the SDT would continue to operate in the interim.
The SDT launched on September 1, 2007 with the mandate to supply 10 percent of South Africa’s rough diamonds to small-to-medium manufacturers, or non-DTC sightholders who previously obtained supply from Diamdel, for beneficiation.
According to the new legislation, diamond miners are obligated to supply 10 percent of their run of mine production to the SDT.
Some miners disputed the legislation arguing that the SDT would undercut prices they could otherwise achieve on tender.
As a result, while during the first year only De Beers was supplying goods to the SDT, Makatini told Rapaport News that the SDT was now receiving goods from three other mining companies. While she declined to name the companies, Petra Diamonds confirmed last week it was supplying the SDT with goods.
The trader will be hoping the extra goods will alleviate some of the pressure it has come under lately due to the low volume of rough diamonds it is able to supply its licensed clients. This past week, the United Diamond Association of South Africa (UDASA) said it was preparing a lawsuit which could reach "hundreds of millions of rand" against the government for losses incurred by the industry as a result of the SDT’s failures.
Chikane said he had already returned to his managerial position at business consultancy Gemini Consulting, in which he holds a 30 percent stake.