Energy Minister Lindiwe Hendricks told parliamentarians ahead of the passing of the Diamond Amendment Bill that its objectives "are for us as a country... to be able to drive the beneficiation of diamonds."
"(It was to) provide for the local supply of diamonds to ensure that diamonds were beneficiated here," Hendricks told parliamentarians.
South Africa is the fourth largest producer of diamonds after Botswana, Russia, Canada, but does not have a huge cutting and polishing industry to add value to the rough gemstone, mined in the north-west of the country.
Introduced in the South African parliament in August 31, the law will give the South African government powers to redirect a higher proportion of rough diamonds to local South African cutters and polishers.
Under proposals in the bill, diamond producers are required to send a percentage of their total rough diamond output to the State Diamond Trader.