De Beers has reduced the supply of rough diamonds it will be offering sightholders in the coming year, as it fulfills its commitment to support diamond manufacturing in Namibia.
The company signed an agreement with the Namibian government last year, committing to allocate 15% of its Namibia production to state-owned company Namdia, which will conduct independent sales on behalf of the government. The move was part of the country’s beneficiation efforts to diversify its diamond industry. In that vein, De Beers also agreed to increase the amount of goods it provides its Namibia-based sightholders.
De Beers supplies rough on a contract basis, whereby its sightholders make what is known as an intention to offer (ITO) – an indication of how much rough they will require for the coming year. The company has about 80 core clients at its international sights, which take place 10 times a year in Botswana. As part of its beneficiation program, it also supplies rough in separate sights to 11 local sightholders in Namibia, 20 in Botswana and seven in South Africa.
With the new ITO period starting in April, sightholders are bracing for lower supply given De Beers’ new commitments to Namibia and a similar arrangement already in place in Botswana, where the government takes 15% of local production to sell via Okavango Diamond Company. De Beers allocates an additional 10% of its production to its auction business before distributing the remainder through the sight system.