Share

De Beers' buyers said to shun diamonds

Johannesburg - De Beers’s customers declined to buy about a third of the diamonds offered for sale this week by the world’s biggest producer, according to two people familiar with the process.

The buyers, or sight holders, exercised the right granted by De Beers this month to defer purchasing about 25% of the stones on offer and rejected about another 10%, said the people, who asked not to be identified as the information isn’t public. Only about $300m of the $450m of diamonds were bought, the people said.

The latest sign of turmoil in the $80bn diamond industry is another blow for Anglo American [JSE:AGL], 85% owner of De Beers, as traders, cutters and polishers suffer from a squeeze on credit and weaker-than-expected demand for jewellery. Buyers in India, where almost 90% of stones are cut and polished, threatened to ban imports this month amid complaints about a supply glut.

Anglo has previously counted on diamond revenues to offset a collapse in the price of other metals and minerals it mines. Chief executive officer Mark Cutifani is seeking to cut jobs, sell mines and lower costs as investors fret about slowing Chinese growth and as prices for copper, iron ore, thermal coal and platinum trade in or close to bear markets.

Cutifani may be forced to cut the company’s dividend for the first time since 2009 according to analysts at Barclays, JPMorgan Chase & Co. and Investec .

De Beers sells diamonds at prices it sets at invitation- only sights held 10 times a year at its offices in Botswana. Sight holders, who must meet criteria set by De Beers, are asked to declare how many diamonds they intend to buy at the start of the year and risk getting a lower future allocation should they reject too many stones.

We live in a world where facts and fiction get blurred
Who we choose to trust can have a profound impact on our lives. Join thousands of devoted South Africans who look to News24 to bring them news they can trust every day. As we celebrate 25 years, become a News24 subscriber as we strive to keep you informed, inspired and empowered.
Join News24 today
heading
description
username
Show Comments ()
Rand - Dollar
18.92
+0.1%
Rand - Pound
23.88
+0.1%
Rand - Euro
20.39
+0.2%
Rand - Aus dollar
12.32
+0.1%
Rand - Yen
0.13
+0.0%
Platinum
908.05
+1.2%
Palladium
1,014.94
+1.3%
Gold
2,232.75
-0.0%
Silver
24.95
-0.1%
Brent Crude
87.00
+1.8%
Top 40
68,346
0.0%
All Share
74,536
0.0%
Resource 10
57,251
0.0%
Industrial 25
103,936
0.0%
Financial 15
16,502
0.0%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

LEARN MORE
Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders