The DTC’s decision to “restructure” Diamdel, its vehicle for selling to non-sightholders, hasn’t raised the fuss I thought it would, considering how, just a few years back, the diamond associations touted Diamdel as the savior of the secondary market. Maybe everyone is beginning to realize that the DTC is no longer the only game in town, or perhaps everyone is just so beaten down and blown away by all the changes that they don’t think it’s worth it to even complain anymore. (There is, however, this article in Israel’s Ha’aretz.)
In any case, DTC spokeswoman Lynette Gould recently took some time to answer my questions on Diamdel. Here are her (slightly edited) answers:
Your release says “The proposed Diamdel reorganisation takes into account De Beers’ stated commitment to support the secondary market. Diamdel will continue to sell to non-Sightholders.” Will the amounts Diamdel is selling to non-sightholders be the same? Will the clients remain the same?
Diamdel achieved sales of $417 million in 2006. Whilst it is likely that this figure will be reduced, Diamdel will continue to sell hundreds of millions of dollars of diamonds into the secondary markets. As to who the clients will be that is a matter for the management of the new model to decide.
The release mentions new arrangements in Namibia and South Africa. Won’t that mostly mean diamonds even those diamonds end up in the hands of sightholders, since they are the ones with most of the factories there?
In South Africa, 10% of De Beers Consolidated Mine’s [its South African arm] production will be marketed via the new State Diamond Trader. This new institution has been set up by the Government of South Africa to promote the local beneficiation of South African diamonds. Neither the DTC nor Diamdel will have any input into the SDT’s allocation policies, which we understand will seek to target the non-Sightholder sector of the market in South Africa. In Namibia, all sales will be transacted by NDTC. All diamond companies with a licence to operate in Namibia have had the opportunity to apply to NDTC for supply.
Will Diamdel buy on the open market, as it has in the past?
That’s for the Diamdel management team to decide.
On a related note, I will be leaving next week on a De Beers-sponsored tour of Botswana and South Africa, and hope to have an interview with a De Beers executive. If any of you smart people out there have questions you have been dying to pose to the DTC, leave them in the comments or email them to me at rbates – at – reedbusiness.com.
UPDATE: Sorry if the post looks strange or there are font issues. There are some problems with the jckonline blog tool. We are hoping to get them cleared up.