DTC confirms: Fewer sightholders in next round

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DTC confirms: Fewer sightholders in next round

June 20, 2007

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London—In recent presentations to diamantaires in Antwerp, Belgium, and Israel, Diamond Trading Co. (DTC) Managing Director Varda Shine has acknowledged what has been industry speculation for some time: There will be fewer DTC sightholders when the new three-year contract begins next April.

The main reason cited for the reduction is De Beers' commitment to beneficiation efforts in African diamond-producing countries. That means the local diamond-polishing industries in Botswana, Namibia and South Africa will siphon off supply from traditional diamond centers.

Shine discussed the transfer of much of the DTC's activities from London to southern Africa to develop and sustain the economies in those countries.

"That includes both creating employment opportunities for their citizens and maximizing the revenues they receive for their natural resources," she told Israeli sightholders.

She went on to say that beneficiation is necessary to achieve this and that "it is no longer sufficient just to export their diamonds and other minerals to London or elsewhere in the developed world."

The result will likely be fewer goods available from De Beers.

"There is an inevitability that fewer goods will be available for sale to the traditional cutting centers," Shine said. "We cannot know, at this stage, how many clients we will be supplying in the next contract period. That number will be an output of our objective selection process later this year, but I am keen that all applicants are aware that the impact of less availability, increasing competition and our complete commitment to the beneficiation objectives of our joint-venture partners will, inevitably, result in us being able to offer an economically efficient level of supply to fewer sightholders than under the current contract."

De Beers will also see its supply from Russian diamond producer Alrosa cut off completely by the end of 2008, due to a ruling by the European Commission.

While the impact on U.S.-based retailers is unclear, jewelers who source diamonds from sightholders cut from the list may need to change their sourcing strategy.

The DTC currently has 93 sightholders.

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