De Beers Allows Customers to Reject Small Diamonds to Appease Surplus Crisis

LONDON, United Kingdom - De Beers will let buyers reject more diamonds at a sale next week as the mining company shows almost unprecedented flexibility to ease a growing crisis Buyers will also get the option to sell back some diamonds to De Beers on favourable terms, the people said "De Beers is working harder to offer its customers flexibility to try to tackle short-term issues," said Anish Aggarwal, a partner at specialist diamond advisory firm Gemdax.

De Beers sells its gems through 10 sales each year in Botswana's capital, Gaborone, and the buyers - known as sightholders - have to accept the price and the quantities they're offered The sightholders are given a black and yellow box containing plastic bags filled with stones, with the number of boxes and quality of diamonds depending on what the buyer and De Beers agreed in an annual allocation This year, buyers have grown increasingly frustrated with the cost of rough diamonds sold by De Beers as the prices of polished gems slumped.

In the sale next week, De Beers will let so-called buybacks increase to 20 percent, the people said, meaning sightholders can remove up to a fifth of the diamonds in a box and De Beers will lower the price by a similar amount. . Source