Diamond India Ltd. plans to boost imports of rough diamonds directly from miners as De Beers, the world’s biggest supplier, may cut sales to a select group of customers, or so-called sightholders, in the South Asian nation.
The company may seek supplies from miners in Russia, Angola and Botswana to pare its reliance on the world’s biggest diamond company, Sanjay Kothari, chairman of the Gem & Jewellery Export Promotion Council that founded Diamond India, told reporters in Mumbai today.
“The government has advised us to widen our sources of supply and with De Beers planning to reduce the number of sightholders, we will speed up our efforts,” Kothari said. “We will be more aggressive in sourcing from other miners.”
Lower purchases from De Beers may help producers such as Rio Tinto Ltd. and Russia’s ZAO Alrosa to increase sales in the world’s second-fastest growing major economy. De Beers, supplier of more than half of the world’s rough diamonds, expects sales in India and China to grow more than 10 percent a year over the next few years as rising incomes fuel demand for jewelry.
Diamond Trading Co., the distribution unit of De Beers, may remove eight Indian sightholders from April 2008, while adding three new customers, Kothari said. Lynette Gould, a spokeswoman for De Beers in London, declined to comment before the Diamond Trading Co.’s new supply contract begins in April.
DTC said last month its ventures in Botswana and Namibia will sell rough diamonds for the first time. The company sold all its rough diamonds through its London operation during the previous 2005-07 contract period. As many as 75 of the company’s 79 sightholders will be offered gems through London and South Africa, the company said Dec. 17.
“DTC’s move to consolidate business in a few hands will hit small and medium-sized processors and lead to a shortage in supplies of rough diamonds,” Kothari said.
India, which processes 11 out of every 12 of the world’s diamonds, imported rough diamonds worth $8.6 billion in the 11 months ended November, up 15 percent from a year ago. Exports of gems and jewelry in the April-November period rose 23 percent to $13.7 billion from a year ago, according to the Gem & Jewellery Export Promotion Council.
De Beers is 45 percent owned by London-based Anglo American Plc, 40 percent by the Oppenheimer family and 15 percent by Botswana’s government.