De Beers, already grappling with a prolonged industry crisis exacerbated by the coronavirus outbreak, now has another headache to contend with: how to conduct diamond sales when key customers are blocked from traveling?
Botswana, where De Beers conducts its 10 sales each year, on Monday announced a travel ban on 18 high-risk countries as part of an array of measures to protect itself from the pandemic. The list included Belgium, India and China, which are home to many of the world’s leading diamond dealers.
AdvertisementBotswana is the second-biggest diamond producer, just behind Russia, but its role in the global industry is amplified by its relationship with De Beers. The one-time monopoly sorts and sells all its stones in the country, including those mined elsewhere.
At the diamond sales, known as “sights,” representatives from De Beers’s 80-odd customers fly to Botswana for about a week, where they inspect and purchase stones. The next sale is scheduled to start on March 30.
Advertisement“Our intention remains to hold the sight, in line with the desire for it go ahead expressed by customers, but we are developing a suite of contingency plans in the event that it is not possible to hold the sight in the usual manner,” De Beers said in a statement.
De Beers is set to hold an emergency meeting with the government next week, the Botswana Guardian newspaper reported, citing Minerals Minister Lefoko Moagi.
De Beers could look at options such as holding a “blind” sight, where buyers don’t get to look at the goods they’re purchasing. De Beers customers could also send local staff to the sale, as many have representatives in either Botswana or South Africa.
The outbreak has come at a terrible time for an industry already reeling from a disastrous 2019. De Beers made its smallest profit in more than a decade last year after a glut of rough and polished stones destroyed margins for the industry’s crucial middlemen who cut, polish and trade them.