Lucara Diamonds
Wikimedia

The handover tomorrow of two mining permits in Kimberley could be the first sign that the South African government is making illegal mining legal.

Mineral Resources Deputy Minister, Godfrey Oliphant, will specifically hand over two mining permits to artisanal miners (former zama zamas) in Kimberly, Northern Cape.

The artisanal miners successfully negotiated a Tailings Mining Resource (dump) from Ekapa Mining and now have access to 500 ha of ground to mine for themselves.

This announcement was made by a press statement issued to the media by the DMR.

Ekapa Mining is actually part of the Kimberley Ekapa Mining JV - a joint venture between Petra Diamonds and its partner Ekapa Mining and incorporates the Kimberley Underground mine (mining the Bultfontein, Dutoitspan and Wesselton kimberlite pipes), extensive tailings retreatment programmes (with total tailings resources of some 140.1 Mt) and the high volume Central Treatment Plant (“CTP”).

The combination of these diamond mining assets in Kimberley has yielded cost synergies and allows for a mine plan to 2035.

The statement failed to clarify the legalities around this ‘deal’ – specifically with regards to how zama zamas become artisanal miners, how the artisanal miners would mine the resource or more importantly, who they would sell their recovered diamonds to.

Some investors will question the structures of such a deal considering zama zamas are known to sell their diamonds and other valuable metals through illegal channels and corrupt institutions.

The announcement was also interesting considering Oliphant presented at the Junior Indaba conference yesterday and although highlighting the DMR’s role to assist junior miners made no mention of this Kimberley ‘deal’.

Petra Diamonds and Ekapa Mining have at this stage issued no statement in relation to this announcement.