New SA State Diamond Trader Appointed

After months without an official replacement, the South African State Diamond Trader (SDT) has a new chief executive, Futhi Zikalala, according to Business Report. She replaces Abbey Chikane whose contract was not renewed in September 2008.

Zikalala was acting chief executive after Chikane’s departure.

The high hopes pinned on the SDT quickly soured, with reports of clashes between Chikane and his boss, SDT chairperson Linda Makatini over implementation of the law in a turbulent market.

The SDT was formed to insure supply of rough diamonds to local diamond polishers. Its charter calls for purchasing up to 10 percent of run of mine goods for that purpose. One of the first hurdles it met in implementing its agenda was that it is to buy the goods at fair market prices and sell it at fair market prices. In this situation, the SDT won’t be able to cover its costs.

This proved to be a central issue after the Treasury Department was not very forthcoming in financing the SDT’s purchases.

Other issues included what was viewed as oversights in drafting the law. SDT chair Makatini insisting that the law be obeyed to the letter, refusing to amend it.

As a result, two tenders were cancelled because the SDT didn’t see the goods in advance. As first reported on IDEX Online, the DTC Sight in South Africa was postponed and many Sightholders were not able to see their goods. Other issues have to do with licensing of small business that can’t afford an extra partner that Black Economic Empowerment laws require.