South Africa's Industrial Participation programme linked to the modernisation and downsizing of the SA Air Force (SAAF) with Hawk and Gripen jet aircraft has created another 700 jobs, this time through a multi-million dollar investment in jewellery manufacturing in the Free State goldfields.

The investment, by South Africa Royal Manufacturers (SARM), a Canadian-South African partnership supported financially by BAE SYSTEMS, has created a new gold chain and jewellery manufacturing facility located close to Harmony's gold refinery at Virginia in the Free State.

Harmony Gold Mining Company Ltd has provided buildings and housing in support of the new business, an anchor project in the integrated approach between Government, the Gold Mining industry and other stakeholders to alleviate poverty by regenerating the region's economy.

SARM aims to export $15-million (about R120-million) worth of gold rope chain in the first year of full-scale production. This equates to about two tons of gold processed locally by South African workers into 10, 14 and 18 carat value-added product.

"This new manufacturing facility fits well with the Government's Integrated Manufacturing Strategy. It is bringing hundreds, potentially thousands, of new jobs and skills to the Free State Gold Fields which have seen major job losses over the last two decades. By employing people in down-stream manufacturing, we are creating a long-term perspective for the Free State Gold Fields. This approach has been at the centre of the National Industrial Participation Programme linked to the acquisition of the Gripen and Hawk aircraft," explained Trade and Industry Minister Alec Erwin.

SARM manufactures gold rope chain for export to the North American market. The major partners in this new venture are leading Canadian jewellery manufacturers, wholesalers and distributors, Royal Chain Canada Incorporated and US based investors (combined 60% shareholding) and the Industrial Development Corporation of South Africa Limited (IDC) (40% investment partner) which have also extended an equipment loan to SARM.

Harmony is providing gold and support services to SARM and provides beneficiated gold in the form of carat alloys, wire, and strip, which are then made into finished jewellery by 700 predominantly female employees at SARM. SARM feeds Royal Chain Canada's North American distribution network.

The 700 new jobs have been created in an area targetted for downstream beneficiation projects by government because of the high levels of unemployment following the decline of the local gold mining industry.

BAE SYSTEMS has been a prime mover in creating the SARM partnership by an initial investment of $5-million (currently roughly R40-million) to fund capital equipment and finance export sales. This will allow SARM to build capacity and market share in this highly competitive and very profitable market.

Because gold rope chain is hand-made, the venture has been able to create a large number of jobs. Workers drawn from the Virginia area have been given comprehensive skills training.

"We are very pleased that the procurement of the Hawks and Gripens has, through this industrial participation venture, created much needed jobs and attracted strategic foreign investment, manufacturing skills and access to new export markets to a part of the country where they are needed most," said BAE SYSTEMS-Saab NIP Executive Director, Bernard Collier.

"By fulfilling our commitments, we are assisting South Africa in ensuring that value is added to locally mined precious raw materials by South African workers. This project enhances the export revenue base for South African gold, and it creates skilled jobs. It is another example of how we are honoring our commitment to deliver $8,7-bn of new economic benefit to South Africa through our IP programme".

SARM's North American investors bring to the venture many years of experience in manufacturing and marketing gold rope chain and jewellery to the North American market. In addition to capital, the investors have also transferred technology, skills and management expertise to SARM.

Royal Chain Canada Incorporated Vice President Sales, Valentino Diaz, believes that "the operations, capabilities and staff of SARM have an unique opportunity to evolve into one of the world's pre-eminent jewellery manufacturers. By leveraging the key North American sales channels already established by SARM's partners and through continuing diversification of product lines, SARM is positioned to eventually challenge Italy as the world's leading producer of gold chain and gold-based jewellery products".

SARM managing director Luis Perez said: "It is SARM's intention to develop a business which will be capable of generating $100-million in annual export sales within the next five years and ultimately, over time, will be capable of generating up to 15 percent added value to local raw gold."

SARM has already exported $3-million (about R24-million) in finished and semi-finished product to North America. Projected sales for 2003, the first full year of production, are estimated at $15-million (about R120-million).

With acknowledgements to INet Bridge and Mail & Guardian.