Feb 8: De Beers and its Central Selling Organisation (CSO) are caught in a pincer movement of declining global demand for diamonds and rebellious diamond producers. The latest producer seeking to opt out of the De Beers marketing umbrella is the Botswana Government. It is, therefore, no surprise that NF Oppenheimer, the new chairman of De Beers, says openly that ``there will be some difficult challenges as we enter 1998.''1997 was a year that everyone associated with diamond production would like to forget. Demand slumped with 1998 likely to be tough for the industry. For De Beers, certainly, 1998 will be no better. Even as it was digesting the exit of Argyle from its CSO in June 1997, Botswana has served notice that it will have to consider other options.
Botswana and De Beers are equal shareholders in Debswana, which in turn owns about five per cent of De Beers' parent companies and nominates two members to the boards of De Beers and the Diamond Trading Company (DTC). Also, it has a series of five-yearcontracts with De Beers' CSO.
David N Magang, minister of minerals, energy and water affairs in Botswana, gave enough hint of his dissatisfaction with De Beers recently at a recent Diamond Conference held in London. Welcoming fresh investment in diamond mines in Botwana, he said: ``We welcome diversity of companies provided they bring with them the technical capability and the financial strength to carry out world class prospecting work. De Beers may be responsible for all of our existing mines...but we believe that diversity of approach and cross-pollination of professional ideas are important in maintaining a cutting edge in the prospecting business.' Magang said about De Beers: ``Even if we are partners (in marriage) we remain two separate people. Some of our interests are shared but some are different...There is also an obvious potential for conflict in the way in which the profits from Debswana mines are shared out.''
Last year De Beers was forced to cut diamond supplies by four per cent, the bulkof it in the second half--leading to further dissatisfaction among producing nations. Nilan Singh, editor, Solitaire, the official magazine of the Gem & Jewellery Export Promotion Council (India), said in a recent editorial: ``World Federation of Diamond Bourses (WFDB) and the International Diamond Manufacturers' Association (IDMA)'s Singapore resolutions stated that the world diamond industry was in a crisis, and put the blame unequivocally at the door of De Beers.''
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
