De Beers to explore greater market access in India

To discuss with industry on linking rough diamond price with polished diamonds

On December 6, De Beers is set to hold talks with select sector officials to discuss profitability and ways to enhance the purchasing power of customers. The meeting’s primary agenda is arriving at a clear linkage between the prices of rough and polished diamonds, which often move in opposite directions.

The world’s largest diamond miner is seeking greater access to the Indian market. As India processes 11 of every 13 diamonds mined across the world, the market here is significant for global miners.

The prices of rough diamonds see frequent increases, through part-time bidders of De Beers, while the prices of polished diamonds sometimes fall substantially. As a result, processors accrue huge losses. “There are a lot of one-time participants in De Beers auctions. This raises the prices of rough diamonds artificially, as these do not involve long-term business relations. These short-term players affect the long-term business a lot,” said a player set to meet De Beers officials.

Long-term players, in contrast, assess their profitability before participating in De Beers’ rough diamond auctions.

“Sustained losses for processors aren’t a healthy sign. This reduces their purchasing capacity and poses the threat of systemic failure,” said another player.

Challenges faced by the sector, manufacturing profitability and access to easy finance will be discussed.