India shines in sale of roughs

Four of five new bulk purchasers named by De Beers, the prime global purveyor, are from India

Four Indian companies are among five selected globally by De Beers, the conglomerate dominating the world's diamond mining and marketing operations, for its periodically revised list of authorised bulk purchasers.

Those so listed are termed 'Sightholders', of which there are now 82 in the world. Nearly half of these are from India. The additions come at a time when the group's diamond sales have been falling, with prices coming down. De Beers' overall sales fell 16.4 per cent to $6.1 billion in 2012 from $7.3 bn in 2011, due to a 12 per cent decline in rough diamond prices. Sales of rough diamonds ('roughs') was $5.5 bn in 2012 compared to $6.5 bn in 2011. Its output of roughs was only 17.9 million carats versus 31.3 mn carats earlier.

The four Indian additions are Asian Star, H Deepak & Co, H Vinod & Co and K P Sanghvi & Sons. The fifth company is based in Hong Kong. Asian Star was earlier on the list and was left out in 2011.

"Through inclusion of five new businesses into the Sightholder community we will be better able to supply them with the right diamonds to support them in adding maximum value to our finite resource," said Philippe Mellier, chief executive officer of De Beers Group.

Diamonds are supplied to sightholders through De Beers' London-headquartered marketing arm, the Diamond Trading Company.

De Beers' world headquarters are now at Luxembourg; its mining operations are in South Africa, Botswana, Namibia and Canada.

About 85 per cent of the world's supply of roughs are cut and polished in India, a reason why the sightholders' list has such a large number from this country. Currently, the Indian diamond processing industry is facing a large shortage of roughs; competition is also rising from other centres, including China and Hong Kong.

  Asian Star re-entered the sightholders' list as the global demand for smaller caratage diamonds has been increasing; last year, it was in short supply. Their expertise is in processing such diamonds. "In 2011, when De Beers finalised the list, we were left out because of non-availability of our category of specialised roughs," said Vipul Shah, managing director.

With global economic sentiment in uncertainty for five years and inflation hitting sentiment worldwide, sales of luxury items such as diamond jewellery are set to get hit this year, too. De Beers believes growth in jewellery demand will be less this year. However, compared to 2012, it expects a more positive picture from China, India and America.

The process of identifying selecting sightholders was modified in 2012, enabling businesses showing sufficient demand through its auction sales to qualify. "The introduction of dynamism into this contract period is a further evolution in our supplier of choice strategy, enabling (our) distribution to be more efficient," said Varda Shine, executive vice-president for global sightholder sales at De Beers.