De Beers has extended its sightholder contracts by one year, a reflection of what it calls “uncertainty” in the market.
De Beers’ current sightholder contracts, which began in 2021, were originally scheduled to run until the end of 2023. But they have now been extended until Dec. 31, 2024, spokesperson David Johnson tells JCK.
“The extension has been put in place in recognition of the uncertain external environment resulting from the global geopolitical situation and associated macroeconomic headwinds,” Johnson says. “As we have in the past, we’re simply looking to be flexible to support our customers during periods of uncertainty.”
The reaction from sightholders was generally positive. In the past, some have found the process of applying for a sight—and then worrying about getting culled from the list—burdensome and stressful.
Yet, given that it’s not uncommon for the diamond business to face uncertain times, some think there may another factor at play here, related to a different contract extension.
In July, De Beers and Botswana—the biggest producer in De Beers’ stable—extended their current agreement for a year. It’s the third time the deal has been extended; it was originally set to expire in 2021 but will now run through June 2023. A long-awaited new deal has yet to materialize.
Some believe that until De Beers knows for sure what’s happening with Botswana—and how much rough it will get from Botswana’s mines—it won’t be able to determine its sightholder contracts or list.
De Beers’ sightholder agreements state, in very broad terms, how much rough clients should expect. It’s hard to determine that without knowing exactly how much rough De Beers will have access to.
The new Botswana contract may also have new requirements regarding beneficiation—particularly regarding the cutting of big stones. That, too, may affect De Beers’ contracts with sightholders.
Most observers believe that De Beers and Botswana will eventually ink a new deal. They also expect it to happen before Bruce Cleaver leaves the role of De Beers CEO early next year. (After he leaves the CEO role, Cleaver will become the company’s co-chair.) Botswana has certainly indicated it wants to remain De Beers’ partner. Yet, until a new deal is finally signed, the drawn-out negotiations seem to be leaving a lot in limbo.
Top: The Jwaneng diamond mine in Botswana (photo courtesy of De Beers)
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