India to sidestep De Beers gem supply

I-Net Bridge | Wed, 06 Jan 2010 16:49

[miningmx.com] -- INDIA is to sign an agreement with Botswana to buy rough diamonds for its cutting and polishing industry instead of using De Beers as middleman, Indian media reported this week.

Indian website LiveMint said an agreement was expected to be inked during the current visit of India's vice-president Hamid Ansari to Botswana which starts Friday this week.

LiveMint, the internet arm of HT Media's Mint newspaper, said that following the conclusion of a framework agreement, the actual sourcing of uncut diamonds was expected to take place after two years.

"Botswana is the world's first or second largest diamond producer. This is of direct interest to us, as we have a large and prosperous diamond cutting industry in Gujarat," Ansari told reporters.

India is the largest importer of uncut diamonds, but most of them were routed through the trading centres of Antwerp.

After buying rough diamonds from 'diamantaires' in Antwerp, the gems are then cut and polished in several industrial clusters, most of them based in Gujarat in western India.

Ansari said that there was a long-standing government policy "to try to get diamonds directly from the source".

"As more and more countries are discovering, direct dealing between seller and buyer is better than the indirect dealing through monopoly organisation in London," said Ansari without naming De Beers directly.

De Beers, the world's largest diamond trading company, controls the mining and distribution of diamonds from Botswana, which accounts for 50% of its global trade.

The contract with De Beers reportedly comes to an end in about two years. Nearly fifth of the total diamonds in the world are mined in Botswana.

India's trade with Africa is around $39bn and trade with Zambia, Malawi and Botswana is around $302m.