Antwerp Diamond Bank (ADB) has made a proposal to finance South Africa’s new state diamond trader. The move comes as the government is implementing new diamond industry regulations, aimed at making more rough available to local players for domestic processing. ADB, owned by Belgium’s KBC bank, declined to comment, but a source familiar with the situation said the move was triggered by the region’s growing importance in terms of the distribution of rough diamonds.

“If the government is successful in achieving its goals, then there will be local financing opportunities,” said the source. He added there was also a risk that South Africa’s new mining laws could restrict rough dealers from exporting diamonds out of the country.Under the new diamond sector legislation, the state diamond trader, who replaces the current South African Diamond Board, and will buy rough from the producers, will be jointly funded by the government’s Industrial Development Corporation (IDC) and private sector.

ABN AMRO, a leading global financer in the diamond trade, which already has a presence in South Africa, said it was talking “proactively” with government to advise them on the future with regard to a state diamond trader and local beneficiation. South Africa’s Nedbank, also an active player in local diamond industry financing, was not immediately available for comment