De Beers is embarking on a tracking program for the diamonds it supplies to sightholders, seeking to ensure that customers create value from the rough they buy.
The company will ask manufacturers for information on polished diamonds outcomes under its new supply contract, which goes into effect in April, Rapaport News has learned. This will allow De Beers to check that manufacturers polish the goods rather than resell them, sightholders explained. It will also enable source verification, and will give the miner access to crucial market intelligence, the sources added.
Sightholders believe De Beers will request details on the sizes and qualities of the polished diamonds. The program is currently a work in progress, and the details are not final.
The plan comes amid a greater focus on value in the new three-year agreement. The contract, which will run until December 2023, will see fewer dealers receive supply than before, as the company wants as many clients as possible to process goods into marketable polished diamaonds rather than “flipping” the rough.
To that end, De Beers will split sightholders into three categories — manufacturers, dealers and retailers — and offer each group a bespoke selection of rough. The application process ended last month.
“They want to police that people who say they’re manufacturing stuff really are,” a rough-market insider said [the week of February 22]. “They also want to try to understand how that manufacturing process works a little bit more clearly.”
One option would be for the customers to provide this data voluntarily, and in return receive information on how the market is processing De Beers’ rough, a sightholder said, cautioning that the plans were still at an early stage. De Beers executives met select clients during the February sight [the week of February 22] to discuss the issue.
The new contract continues the company’s focus on making the market more efficient and transparent, and on creating a collaborative relationship with sightholders, said Paul Rowley, De Beers’ executive vice president for diamond trading, in an interview [Thursday February 25]. It will also help ensure it has the “right goods in the right hands,” he asserted.
“It’s not about policing the system,” Rowley assured. “It’s about having a mature, healthy relationship. It’s not that we’re going to monitor every single polished stone that comes out of the box. This is a relationship that’s built on trust, as well.”
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De Beers to seek sightholders’ polished Data
