Diamond Trading Company (DTC), marketing arm of the world’s largest miner and supplier of diamonds, De Beers, says it is reducing (slightly), the minimum requirement to apply for being one of its recognised suppliers worldwide.
Around 10 days are left for the deadline to show interest in its next global Supplier of Choice (SOC) list, for the 2012-15 period. DTC, which supplies around 45 per cent of the world’s unprocessed (‘roughs’) diamonds market, says it’s cutting the minimum worth of trade handled for the past three years to $50 million from $60 mn earlier. The thresholds for 2008 and 2010 remain unchanged at $20 mn each; those for 2009 were cut by half, to $10 mn from $20 mn earlier.
Faced with enormous demand from potential SOC customers, the company reduced the thresholds, a DTC official said.
The minimum ‘Rough Diamond Utilisation’ involves purchase of roughs and preparation for processing and/or onward sale. It excludes all purchasing of polished diamonds. The decision will allow more diamantaires to apply for the SOC, said Sanjay Kothari, vice-chairman of the apex trade body, the Gems & Jewellery Export Promotion Council (GJEPC). DTC has 34 distributors (‘sightholders’) in India.
All diamantaires want to become sightholders of De Beers. A secure supply of roughs always helps. Those who can’t get on the sightholder list take part in auctions for roughs’ procurement. But an auction is always uncertain for both price and supply security, said Kothari.
SOCs are selected based on a number of other criteria for three years. “It is vital that the selection process is fair to all companies interested in becoming a sightholder, while maintaining our commercial position as a wholesale distributor of rough diamonds,” said Mahiar Borhanjoo, executive director, DTC Sales and Sightholder Services.
“The feedback we received formed a compelling case to adjust downward the minimum diamond utilisation criterion, since global diamond sales during 2009 were substantially lower, and we believe that we need to reflect this in a reduced threshold for that year, he said.
The cut was needed for wider participation in the sightholding process. Since the global economy slowdown put a lot of pressure, the earlier utilisation requirement was on the high side, said a jeweller.
