De Beers is catching a great deal of "friendly fire" these days, from the South African government and its assertions of under-valuation of export diamonds to the Namibian government’s plan to deregulate the diamond trade with its new Diamond Act, while the Company itself seems to be making an important play to expand it’s retail business in the U.S.

The South African Minister of Minerals and Energy has ordered a team investigation of De Beers including such ever-intriguing topics as stockpiling, valuation of sights, single channeling and, possibly, De Beers relationship with the old valuation company, Proval, which was staffed by former De Beers employees. The ministry is now in possession of the team’s report and the decision will be made by May 4, say ministry sources.

At one of the JCK Las Vegas symposia several years ago, the DRB asked Joan Parker, head of Public Relations for De Beers’ in the U.S., whether De Beers’, having lost Argyle as a supplier, shouldn’t be removed from the U.S. government’s anti-trust hit list. At that time, the answer was, "No, not at this time." It seems now De Beers’ has reached a point where it feels it can make arguments convincing enough for the U.S. Justice Department to remove strictures against them. These have been in place since 1945 and have not only allowed De Beers’ to do business in the U.S., but executives of the Company could not even visit the U.S. De Beers’ advertising agency to this day does not involve itself in selling directly to the customer or even through the sight holders. All advertising is generic for diamonds in general.

In recent months, Nicky Oppenheimer has urged a re-thinking of the U.S. anti-trust laws for better business relations and a more comprehensive and complementary foreign relations and business outlook with particular regard to the African nations. Oppenheimer has stressed that sales of diamonds produced by African nations are most important to those nations’ economies and that, while De Beers’ CSO does hold what amounts to a monopoly in the industry, it has continued to act in an extremely responsible manner both for the industry at large and for the individual countries involved.

But as far as one of those African nations is concerned, however, Namibia continues on its path toward deregulation of its nations diamond industry and toward the passing of its new Diamond Act and the country’s parliament has published a report urging passage of the Bill. The passage of the Diamond Act would mean that, for the first time, trade in rough diamonds would be opened to dealers not De Beers.

De Beers’ partner, Anglo American Corp., will shortly move its headquarters to London, making a huge shift in South Africa’s corporate power structure. After its merge with Minorco, Anglo American will own just over 30% of De Beers (with De Beers standing at 40% ownership of Anglo American). Anglo will take the change as an opportunity to expand its mining and selling and will enter the zinc and copper markets, as well as its current base of gold, platinum and, of course, diamonds. In 1998, the Company reached a net income of SAR4.7 billion.

With the move of Anglo American, to London and with De Beers acting so vigorously on the U.S. anti-trust front, one wonders whether a second move is in the offing. De Beers has already moved a large portion of its diamond interests to Luzern, Switzerland – the part of the company entitled De Beers’ Centenary – and has its CSO Office in London. Now, with the millennial attempt at cornering a rich share of direct retail sales, will De Beers stage a move to the U.S.? It seems the only part of De Beers still in Africa are the diamonds in the ground.