DE BEERS may be assessing how it sells diamonds to its select group of buyers owing to depressed conditions in the market last year, said Bloomberg News citing a person who is aware of the Anglo American group’s plans.
De Beers is due to meet up to 80 accredited buyers next week in Botswana for the company’s first sale of the year, said the newswire. Customers have been told to expect an update on possible changes during the gathering, it said.
No final decisions have been made and details are only likely to emerge later in the year, Bloomberg’s sources said. De Beers’s current six-year contract with buyers expires at the end of 2020.
A De Beers spokesman declined to comment on the specific changes being considered. “We will be communicating directly with customers in the coming months about the new contract, which will focus on maximising the opportunities in the new diamond world,” the company said in a statement.
The diamond market has been negatively affected by a glut of supply in previous years which has created a lack of demand in the so-called midstream – cutters and polishers who have the added difficulty of finding credit services drying up in their sector.
One of the ways in which De Beers could change its diamond selling process is to become more subjective on preferred customers. At the moment, it allocates more diamonds to buyers – known as sightholders – that have bought large amounts previously.
It’s designed to reward the strongest buyers, said Bloomberg News. But some in the industry suspect it’s resulted in irrational buying and dumping of stones, especially after De Beers allowed more flexibility in sales last year.