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From the Miners. For the Miners

Jul 7, 2000 11:39 AM   By Karen Nestlebaum
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Imagine working in a diamond mine: backbreaking labor, sweltering heat, low pay, and the knowledge that somewhere in the world, there are people getting very rich on this gravel you’re gouging from the earth. In a more perfect world, a greater portion of the diamond billions would go to those whose labor produces them. Recently, with the creation of S.A. Teemane Ltd., a South African diamond manufacturing firm, the world has, indeed, gotten a little more perfect.

Teemane is a first. Never before have diamond miners, under the aegis of the Mineworkers Investment Company (MIC), actually owned a substantial piece of the action. Teemane’s chairman, Archie Luhlabo, spent 17 years as a miner at De Beers’ Finsch mine. In 1995, he became a director of MIC, the Mineworkers’ Union’s investment arm, which was formed to help miners contribute to and derive benefit from the South African economy.

“At the time, the South African cutting industry was languishing,” said David Hirschowitz, Teemane’s director. “I approached the MIC and suggested that it become part of the cutting industry. Other countries were benefitting from the rough diamonds that South Africa produced, but little beneficiation was being realized in South Africa itself.”

Profiting From Labor

Hirschowitz said MIC’s members warmed to the idea. Who better to create more value out of the rough than the very people who mine it? And so, in 1996, SA Teemane (Pty) Ltd. (teemane, pronounced tee-´mah-nee, means diamond) was established.

De Beers quickly responded to the initiative, providing the fledgling firm with rough from its Diamdel operation, which supplies rough to smaller and newer manufacturers. “De Beers saw the importance of what we were doing,” Hirschowitz says. “It wouldn’t have been possible without their support.”

After proving its prowess as a cutting firm, Teemane was awarded a sight in 1998. Business has gone up every year since the firm’s inception.

Marketed in Antwerp

The firm operates as a partnership. Antwerp-based Taché Company holds a 44 percent interest, and the remaining 56 percent belongs to South Africans. Half of the South African portion belongs to MIC, 10 percent belongs to Hirschowitz and the rest belongs to management.

Taché, for now, plays the all-important role of providing a distribution outlet for the polished Teemane produces. Hirschowitz describes that production as larger, gem-quality goods cut from rough of 2.5 carats to 10 carats or larger. Through Taché’s Antwerp sales office, these goods are available to buyers from all the world’s markets.

Eventually, says Hirschowitz, Teemane would like to develop the capability to market its own production. That would mean forging its own contacts and marketing approach and opening its own offices.

Teemane’s Brand Potential

As of now, the polished produced by this unique firm blends in with the all the rest of the polished in Taché’s inventory. But Hirschowitz believes that, when the time comes to go it alone, the story of Teemane could be a selling point that would support a viable brand name.

“With all the problems of ‘dirty diamonds’ on the market today — diamonds that come from war zones and finance bloodshed — people would know that Teemane diamonds come exclusively from De Beers, which doesn’t buy from any war zones,” he said. “And they would know that the partners in the company are the miners of South Africa who mine these stones. The beneficiation goes back to the constituents.”

Luhlabo’s New Career

The MIC has now earned itself a unique status as miners who polish and sell the diamonds they mine. But Archie Luhlabo has an even more unique status — a miner-gone-executive.

According to Hirschowitz, in Luhlabo’s 17 years at Finsch, he had never laid eyes upon a piece of diamond rough. That is because, with the security system that is in place, the miners handle nothing but broken rock. They place the gravel on conveyor belts that take it through the crushing, washing and sorting process that eventually yields the rough.

So, Luhlabo started out with a zero accumulation of diamond knowledge from his years of mining. Hirschowitz said he learned the manufacturing process from the ground up. In addition, he underwent the necessary management training to enable him to understand the fundamentals of the operation. His main function, as the firm is currently structured, is to work with the factory manager to increase efficiency.

“For Archie to head up this initiative was an incredible opportunity,” says Hirshowitz. “De Beers saw it as important to make him a substantial player.”

Training Others

Teemane has grown to an operation employing 27 people. It has formed its own training program to bring more people from the category South Africa identifies as PDIs (previously deprived individuals) into the diamond cutting industry. Hirschowitz says this color-blind designation is meant to remove race from the discussion. Whoever was disadvantaged under the apartheid system can benefit from programs aimed at PDIs. While most of those beneficiaries are black, other races are represented as well. At Teemane, the majority of cutters are black, but race has not been a factor in the hiring process.

An Inspiration

Clearly, SA Teemane is a symbol of the vast changes that have swept South Africa since the defeat of the apartheid system. De Beers is reportedly working with a few other fledgling firms to recreate this success and seed the industry with more homegrown firms.

“It’s been important for the diamond cutting industry, and for De Beers too, to be a shining example in this area,” says Hirschowitz.

The word Teemane means diamond, in the language of South Africa. And the company is indeed helping to translate the diamond industry into a language that’s meaningful to all South Africans. It’s one more symbol of the change that has come to the country and its diamond industry. But the real change will come years hence, when Teemane is one among many black-owned diamond firms, exceptional only for its role as the pioneer.
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Tags: De Beers, Diamdel, Economy, Manufacturing, Production, South Africa
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