According to Mining Weekly, South Africa’s Department of Mineral Resources plans to develop a new business model for the State Diamond Trader (SDT) before the end of 2010.

In a budget vote speech, Mineral Resources Minister Susan Shabangu noted that the challenges faced by the SDT, which has sustained a heavy blow due to lower diamond prices, were compounded by its current financial business model.

Minister Shabangu stated: “The department is assessing the prospect of a new business model for the SDT, which will allow it to continue implementing its core mandate of promoting equitable access to, and beneficiation, of diamond resources, addressing distortions in the diamond industry and correcting historical market failures to develop and grow South Africa’s diamond cutting and polishing industry.”

The former Department of Minerals and Energy (DME) was split into a Department of Mineral Resources and a Department of Energy in May. The split has not yet been promulgated by Parliament.

The department expects the proposed mineral beneficiation strategy to be ready for adoption as a policy by July.

Mining Weekly quotes the minister as saying: “I am certain that as we embark on our beneficiation route, all stakeholders will benefit from the country’s comparative and competitive advantages.”

The new strategy is expected to present further opportunities for investment in South Africa for local and foreign investors, with the intention to increase the “value-addition” per capita in South Africa.

Since the beginning of the world crisis, the aggregated commodity prices of minerals produced in South Africa lost about 40% of their value. The minister noted that although it had originally been anticipated that some 100,000 jobs would be lost in the mining industry, the government, business and labor sectors collaborated and managed to contain the redundancies to less than 25,000 jobs.

In response, the CEO of the Chamber of Mines (CoM) Mzolisi Diliza stated: ““We are grateful that Minister Shabangu acknowledges the important role that the mining industry continues to play in this country and the need to ensure that we address both the short- and long-term challenges facing the industry to ensure that we emerge as a stronger industry when the world economy recovers from the current downturn.”