DTC under pressure to move operations

The De Beers Diamond Trading Company said Thursday it was in the process of detailed discussions with the Botswana government to extend its activities in the country, including sales and marketing, South Africa’s Business Day reports.

The move effectively marks the erosion of the London-based DTC as the single-channel marketing organization, spun off from the De Beers Group as a separate profit centre in July.

Earlier this week, Minerals and Energy Minister Phumzile Mlambo- Ngcuka said she would like to see DTC relocate its headquarters to Africa, which would further support local beneficiation.

Meanwhile, De Beers has reportedly urged its clients in other diamond centers to join forces to help create a competitive diamond hub with a viable cutting and polishing industry in southern Africa.

De Beers has always argued local manufacturing close to the mine is economically not viable, and has extolled the benefits of controlling the interests of individual countries to create what is termed the London selling mix. This has, in turn been promoted as the DTC brand.

But the pressures applied on De Beers in South Africa and Botswana, combined with a sharp reduction in the amount Russia will be allowed to sell to the diamond giant under European Union competition law and no prospect of major mines in the near future, have forced the South African company to concentrate on securing resources on its home turf, the newspaper reports.

“We recognize the patriotic pride that is summed up in the idea that a diamond is both mined and manufactured in SA,” De Beers Managing Director Gary Ralfe reportedly said during this week’s Mining Indaba Conference in Cape Town.

DTC’s external affairs director reportedly said: “Sales and marketing activities which currently take place in London and in the 15 other marketing countries will continue.”

But many analysts reportedly say the effect of marketing Botswana’s diamonds will be much broader, effectively relinquishing the single marketing concept and bringing it closer to the issue of the origin of diamonds by focusing on each country’s production.