Industrial heritage is attracting a growing focus within the international expansion of research around heritage tourism. The largest share of literature relates to industrial heritage in developed economies. The aim in this paper is to examine industrial heritage tourism in a developing economy context and specifically the challenges of maximising heritage tourism for local development in South Africa. The analysis focuses on the diamond-mining village of Cullinan in Gauteng Province, South Africa. In terms of methods and sources the analysis combines material from policy documents from the provincial and local government, local tourism data, and visitor trends to the heritage site, a visitor survey and key stakeholder interviews. Overall, the results reveal that the assets of industrial heritage tourism are underperforming in terms of growing the local economy at Cullinan. In interpreting this finding the study shows that the key explanations relate to the capacity constraints on local governments in tourism development, planning and management. The analysis shows that capacity constraints at the level of local government must be addressed if the potential of industrial heritage tourism in South Africa is to be maximised for the future benefit of local economies.