De Beers expanding rough customer base

London--Beginning in March 2015, companies that are not De Beers sightholders will have the opportunity to compete for the rough diamonds that weren’t offered to, or refused by, sightholders, and will be known as “accredited buyers.”

Accredited buyers will have the chance to purchase ex-plan: rough that falls outside of the intention to offer (ITO), the 12-month forecast of what De Beers intends to offer each sightholder based on the size, clarity, etc. of diamonds they normally need. De Beers said it expects to have an “enlarged pool” of ex-plan availability in the next contract period, as it makes more rough available through this channel to give different diamond companies, not just sightholders, the ability to show demand for its diamonds.

Accredited buyers also can compete for the rough diamonds that were in boxes refused by sightholders.

In order to qualify as an accredited buyer, companies will need to meet many of the same criteria as De Beers’ sightholders and auction customers do; in short, they need to have purchased a certain amount of rough diamonds in the year prior to the beginning of the contract period, adhere to De Beers’ ethics principles and meet certain financial requirements.

De Beers sells 90 percent of its rough diamonds through its global sightholder system (GSS), with the remaining 10 percent sold via De Beers Auction Sales, formerly known as Diamdel.

In this current contract period, De Beers has 83 sightholders. The company would not give an estimate on how many sightholders it anticipates accepting in the next contract period, nor on how many accredited buyers it expects to have.

In addition to the accredited buyers, De Beers is adding another wrinkle to its next three-year contract period--“Strategic Supply,” which will be available by invitation only to companies that “drive value addition,” such as by creating consumer demand for diamonds.

De Beers spokesman David Johnson said invitations for Strategic Supply can go to any diamond company that De Beers perceives as adding value to the diamond pipeline, whether they are sightholders, accredited buyers, auction sales customers or none of the above.

Invites to apply for strategic supply are scheduled to be sent on Dec. 1, and Johnson said those accepted will become sightholders. Strategic Supply will be offered on a 12-month basis, like ITOs, but will not renew automatically during the three-year sightholder contract period. A company invited and