DI to bypass De Beers

Diamond India plans to boost imports of rough diamonds directly from miners as De Beers, the world's biggest supplier, may cut sales to a select group of customers, or so-called sightholders, in India.

The company may seek supplies from miners in Russia, Angola and Botswana to pare its reliance on the world's biggest diamond company, Sanjay Kothari, chairman of the Gem & Jewellery Export Promotion Council that founded Diamond India, said in Mumbai on Wednesday.

"The government has advised us to widen our sources of supply," Kothari said.

"The government has advised us to widen our sources of supply and with De Beers planning to reduce the number of sightholders, we will speed up our efforts," Kothari said. "We will be more aggressive in sourcing from other miners."

De Beers, supplier of more than half of the world's rough diamonds, expects sales in India and China to grow more than 10 per cent a year over the next few years as rising incomes fuel demand for jewellery.

Diamond Trading Company (DTC), the distribution unit of De Beers, may remove eight Indian sightholders from April 2008, while adding three new customers, Kothari said. Lynette Gould, a spokeswoman for De Beers in London, declined to comment before the DTC's new supply contract begins in April.

"DTC's move to consolidate business in a few hands will hit small and medium-sized processors and lead to a shortage in supplies of rough diamonds," Kothari said.

India, which processes 11 out of every 12 of the world's diamonds, imported rough diamonds worth $8.6 billion in the 11 months ended November, up 15 per cent from a year ago.