Diamond processors welcome supplier contract extension

Diamond Trading Company (DTC), the marketing arm of De Beers, the South Africa-based company which dominates the global supply of rough diamonds, has given the diamond processing industry in India some good news.

It has decided to extend all existing supplier of choice (SoC) contracts by another year. The SoC contract is normally for three years. The extension will take effect from March 31, 2011. De Beers supplies around 40 per cent rough diamonds into the global market. (And, almost all of these pass through India at some stage of processing).

Vasant Mehta, chairman of the Gems & Jewellery Export Promotion Council (GJEPC), the apex diamond trade body in India said, “This is a favourable decision, as sightholders will get assured supply of roughs during the extended period.”

The industry here attributed the DTC/De Beers decision to the downturn in business during the past two years due to the global economic slowdown. Thus, the extension not only applies to sightholders (the term for buyers of rough diamonds registered with them, around 35 in India), but to all those with SoC contracts.

“By extending the current SoC by one year, we are providing both sightholders and non-sightholders with the time they need to focus on recovery,” said Varda Shine, CEO of DTC.

“We welcome the interest shown by companies that wished to apply to become sightholders in 2011. We hope that they understand the necessity of our decision not to run an assessment in 2010. We look forward to engaging with them during the application process for the 2012-15 contract period, which will take place next year,” Shine added.