Diamonds will be topic when businessmen meet

Press, 23 September 1987, Page 54

Diamonds will be topic when businessmen meet

NZPA-Reuter London An elite group of 140 businessmen will fly to London next month from places as varied as Antwerp, Bombay, Tel Aviv and New York, all with one thing in common — diamonds. The group, carefully chosen from thousands of dealers, has been invited to the next diamond sale by the Central Selling Organisation, the international marketing arm of De Beers Consolidated Mines, Ltd.

Protocol dictates that the sale, known as a “sight," be conducted in private amid strict security. There will be none of the usual, haggling about quality, price and payments that typify most business deals.

From anonymous, for-tress-like offices in London’s Charterhouse Street, the South African concern controls more than 80 per cent of the world diamond market.

“In diamond districts they refer to us simply as 'the syndicate,’ but it doesn’t seem a derogatory label,” said Andrew Lamont, a company spokesman. De Beers, which coined the slogan “a diamond is for ever,” spends SUSIIO million (5NZ187.2 million) a year on advertising and promotion. The company regulates supplies of gems and industrial diamonds from mines in 20 countries to dealers and cutters in the main diamond centres.

“They are very good friends. They give us stability, but we still guard our independence as dealers,” said a client, who declined to be identified.

De Beers early this month raised the price of rough diamonds by an average 10 per cent from the next “sight,” the third price hike by the company in less than two years.

The increase, which could be as high as 20 per cent for high-grade diamonds, came on top of average price rises last, year of 14.5 percent. ' Clients, at the "sight,"

will each be allocated a Cardboard “shoebox” containing small packets of stones carefully sorted into different categories and grades. The price is not negotiable and, by and large, clients are obliged to purchase the full allocation or return the box; Those who accept the box, however, are virtually guaranteed of making a profit. Prices of D-flawless diamonds, the fop grade, have risen to around SUSIS,OOO ($24,300) a carat from SUSI2,OOO ($19,400) early this year and are sharply up from SUSBSOO ($NZ13,770) at the' bottom of a deep slump in the diamond market that started in 1981.

De Beers rode out the recession by withholding supplies from the market and intensifying a worldwide marketing campaign. “The over-all effect was that our own stocks of diamonds rose to an alltime high. Our surplus cash... was soon drained, and we had to make relatively high borrowings to finance the stockpile,” De Beers chairman, Julian Ogilvie Thompson, told a diamond convention in Tel Aviv in June.

By then, De Beers’s diamond stockpile had been cut to SUSI.B4 billion ($2.9 billion) from SUSI.9S billion ($3.15 billion) in 1984. Inventories of rough and polished stones outside the C. 5.0., closely monitored by a global network, fell to SUSI.S billion ($2.43j billion) from a peak W about SUS 9 billion ($14.58 billion).