De Beers is considering key changes to the way it sells diamonds as frustration mounts among its customers—a supposedly elite group that are now struggling to turn a profit.
De Beers has signaled to its handpicked buyers that it may significantly reduce their number, possibly by the most since its monopoly ended at the beginning of the century, according to people familiar with the discussions. It’s also reconsidering the way that diamonds are allocated among the group, said the people, who asked not to be identified because the conversations were private.
The world’s biggest producer is wrestling with the way it sells diamonds after a disastrous year for the companies that cut, polish and trade the world’s gems. The middlemen of the industry are in trouble after a glut of both rough and polished stones destroyed profit margins and banks tightened financing. The situation was made even worse as De Beers held firm on its selling prices until late in the year.
By reducing the number of its customers, the company could help strengthen the remaining businesses.
De Beers executives will meet the 80-some accredited buyers next week in Botswana for the company’s first sale of the year and annual cocktail party—a tradition that dates back to when De Beers was run by the billionaire Oppenheimer family. Customers have been told to expect an update on possible changes during the gathering, said the people.
Read more about the elite De Beers diamond buyers club on the Mining.com website HERE