This month’s De Beers sight—the final one of 2024—presented a critical dilemma for many sightholders. Despite a 10% to 15% price cut on rough diamonds, the adjusted prices still failed to align with the market, leaving clients with a tough choice: purchase unprofitable goods or risk losing future allocations.
Minimum Purchase Pressure
Many sightholders struggled to meet the minimum purchase requirement of $15 million and three boxes of diamonds. After taking advantage of deferrals allowed by De Beers earlier in the year, failing to meet these thresholds could jeopardize their allocations for 2025.
However, with a weak secondary rough market and sluggish polished demand, buying boxes meant likely losses—whether resold as rough or manufactured into polished stones. This led to a strained atmosphere at the sight, which officially ran from Monday to Friday last week, but negotiations extended into Wednesday, December 11.
Strategic Buying to Maintain Allocations
Reports indicate that many clients refused goods beyond what De Beers and the market expected. However, there was also significant “political” buying—purchases made to maintain good standing with De Beers rather than for profit. One market source noted, “Everyone is playing with the ITO,” referring to the rough diamond allocation system, also known as the “intention to offer.”
Despite initial hesitation, sales picked up mid-week, with proceeds estimated at $200 million, including purchases by Botswana’s state-owned Okavango Diamond Company (ODC). This figure was relatively high given the market conditions.
Antiquated Systems and New Measures
The sight system highlights a long-standing issue in the industry. While sightholders aren’t contractually obligated to buy, declining offers can lead to future consequences. De Beers traditionally bundles diamonds into assortments, requiring buyers to accept both premium and less desirable goods.
To ease the process, De Beers expanded its buyback policy this month, allowing sightholders to sell back 20% of 4-grainer and larger goods, compared to the usual 10%. This measure aimed to offset risks, though some used it as a delay tactic to decide on their purchases.
What’s Next for Sightholders?
De Beers’ CEO Al Cook recently announced plans to reduce the number of sightholders starting in 2026. For companies barely meeting purchase thresholds, this only grants them an additional year of status, once considered a license to print money.
As the sight concluded, many sightholders opted to secure their 2025 supply despite uncertainties, hoping the market will rebound. Dudi Harari, a former rough broker, summed up the current reality: “People remember the old days when being a sightholder was a license to make money. But it’s not anymore.”