Reuters - Video

Edition: US | UK | IN | CN | JP

Video

End of an era for De Beers diamonds

Wednesday, October 02, 2013 - 02:22

Oct. 3 - De Beers has begun moving its diamond sales operation to Botswana in southern Africa. The world's leading diamond producer hopes to create a niche which might one day compete with the likes of Antwerp but as Hayley Platt reports not everyone sees it as a positive move.

▲ Hide Transcript

View Transcript

It's a business model that dates make 70 years. Ten times a year De Beers holds what are known as Sights. Traders are invited to view and hopefully buy their rough diamonds - this one's worth around $10,000 London's always been the sales venue - until now. Mihir Dalal's job is moving to Botswana. He's not going, but Varda Shine, head of sales, is. SOUNDBITE: Varda Shine, Vice President, De Beers, saying (English): "Botswana is the biggest producer in the world by value and by being there we are closer to most of our producers, South Africa, Namibia and Botswana and we believe when you look at what is happening in southern Africa, it is becoming a bigger and a more important part of rough trading." The world's largest diamond producer by value - already part-owns numerous mines in Botswana. But moving its $6 billion-a-year sales operation from an international financial centre to a comparative backwater has raised eyebrows. There are few direct flights to Gaborone, visa difficulties and a lack of suitable hotels. But Botswana - where diamonds account for 80% of exports - is keen to keep profits from its raw materials at home. After years of negotiations De Beers - now owned by Anglo American - agreed to move. A new $120m diamond centre has been built and 85 of its 300 London staff are re-locating. SOUNDBITE: Varda Shine, Vice President, De Beers, saying (English): "We are going to bring the eighty best and biggest diamontels in the world into Botswana ten times a year, I believe is going to see another wave of new businesses be it entertaining, be it in services and be it entrepreneurship." The new operation will be closely watched by the industry. De Beers has been battling lower production, a shrinking market share and challenges to its sales model for years. It's share of rough diamond sales was 37% last year - compared to 80% in the 80s and 90s. Some in the industry fear separating sales from the corporate centre will undermine the company's depth of expertise. The move certainly won't solve all De Beers challenges. But it will further cut links to the Oppenheimer dynasty that until last year ran De Beers for almost a century.

Press CTRL+C (Windows), CMD+C (Mac), or long-press the URL below on your mobile device to copy the code

End of an era for De Beers diamonds

Wednesday, October 02, 2013 - 02:22