October marked “the end of an era” at De Beers, as it closed the book on 80 years of holding its sights in London. And now, we turn the page to a new era: November brings the first allocation held at De Beers’ new sorting center in Gaborone, Botswana.
This move affects three groups: The people of Botswana, who hope to benefit from the increased activity there; employees of what used to be known as the Diamond Trading Co., some of whom have elected not to move to Africa (with De Beers vice president Varda Shine’s status unclear); and the company’s clients, who have to attend the sights 10 times a year.
And speaking with the latter group, reactions to the move ranged from nonchalant to strongly negative.
The chief complaints center on the travel. From virtually every cutting and trading center, Botswana is a longer trip than London. And we are talking substantially longer: from New York to London is six to seven hours; New York to Gaborone, 17. Which means, for U.S. clients, a trip that used to take a few days now takes closer to a week. “I don’t know many business owners that can take a week out of their schedule,” one said.
Others worry whether the country will be ready to handle everyone. “There is growing concern about the speed,” said one sightholder. “It will be a pity if Botswana fails to live up to the expectations.”
Specifically, there are worries about the airport, the lack of Wi-Fi, and not enough suitable food for those with dietary restrictions. Some also think the new set-up will lack the old “community” feel.
“The sights were always a clearinghouse for information,” one sightholder noted. “Looking at the goods was secondary. But bumping into people in the halls, and having after-hours meetings always played a role. There aren’t many restaurants in Botswana, and the hotels aren’t terrible. But I imagine a lot of that will probably be missing.”
The increase in local crime is so far limited, but sightholders say that concerns them, too.
Some clients said they sympathize with Botswana’s desire to get more for its gems. But they feel that the government is acting out of grievance, and perhaps has its hopes too high. “De Beers is talking about sightholders buying homes there,” one said. “I don’t see that happening.”
In the background of all this are ongoing complaints about the unprofitability of the assortments—which most blame on CEO Philippe Mellier, and his relations with Anglo American.
“Anglo paid a lot of money for De Beers,” one client said. “There’s a number there that wasn’t there before. So they have to push a little bit. And that doesn’t leave their customers in a very good position.”
Faced with too-high prices, clients have retaliated by turning down boxes—according to one report, 15 percent of the goods were refused at the last sight.
At least one sightholder feels the new move could help the situation. “Maybe if we have a chance to make our case to the source, they will see the challenges we face,” the client said.
In any case, there is a growing feeling that something has to happen soon: “Something has to give,” complained one client. “You wonder if the new hierarchy at De Beers really has a long-term vision.”
Or, as another put it: “It makes you wonder if being a sightholder is worth it anymore.”