2007

De Beers to Cut Sightholders; Restructure Diamdel

Summer 2007

A recent survey by the Jewelry Consumer Opinion Council, run by MVI Marketing, found that for most consumers place price above all else when diamond shopping. The survey asked 2,250 consumers about their jewelry shopping habits. 42% of consumers said that De Beers’ Diamond Trading Co. (DTC) Managing Director Varda Shine has acknowledged that there will be fewer DTC sightholders when the new three-year contract begins next spring.

The main reason cited for the reduction is that local diamond-polishing industries in Botswana, Namibia and South Africa will be siphoning off greater supply from traditional diamond centers. The DTC meanwhile, will move its activities from London to southern Africa to help integrate African industries into the world diamond business.

At the same time, Russian diamond producer Alrosa is also completely cutting off supply to De Beers by the end of 2008. The result will likely be fewer goods available from De Beers, Shine has said.

There has been no indication of how many of the current 93 sightholders will be cut.

De Beers has also announced that it will restructure the Diamdel group of companies, which provide rough diamonds to non-sightholders.

Diamdel will continue to sell to non-sightholders, principally through Diamdel NV in Antwerp and Hindustan Diamond Corp. in India, though most operations will be scaled back. Diamdel’s South Africa office will close and, in Namibia, the Namibia Diamond Trading Co.—the sales and marketing company owned jointly by de Beers and the Namibian government—will supply to that country’s cutters and polishers.