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DE BEERS STREAMLINES DISTRIBUTION

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De Beers
De Beers

De Beers Group (De Beers) this week provided an update on the upcoming Supplier of Choice (SoC) application process, and the continued evolution of the Diamdel distribution model.
The mining giants will continue to focus on SoC as the primary method for distributing De Beers’ rough diamonds, and will be proposing enhancements to the Diamond Trading Company’s (DTC) Intention to Offer (ITO) process.
The DTC will be streamlining the SoC application process for the 2012-15 contract period, to make it simpler, quicker and more efficient for all participants.  This will include requiring just one simplified Contract Proposal Questionnaire (CPQ) per applicant to cover multiple categories of goods.  In addition, during the new 3-year SoC contract period the DTC will be replanning future ITO allocations to better reflect individual Sightholder demand in the preceding ITO period.
Following the success of its rough diamond auction platform over the past 2½ years, Diamdel will continue to transfer more of its allocation into the auction format whilst seeking to provide wider market access. While Diamdel auctions will continue to represent a relatively small proportion of De Beers’ overall sales of rough diamonds, existing Diamdel customers, DTC Sightholders and, over time, the wider market, will all be able to participate in the Diamdel auctions. The ability for DTC Sightholders to participate in Diamdel auctions will commence in October 2010 and will be extended to further qualifying diamantaires (in addition to existing Diamdel customers1 and DTC Sightholders) from April 2011. This will not impact on DTC Sightholders’ ITO allocations.
As part of the innovations anticipated in the new 2012 – 15 SoC contract period, it is envisaged that Diamdel clients who demonstrate consistently strong demand for certain categories of rough at the Diamdel auctions will, subject to availability, have the opportunity to compete for an ITO for those goods during the course of the 2012 – 2015 SoC contract period by being invited to submit a mid contract CPQ.
These pilot plans constitute part of the continued evolution of De Beers’ rough diamond distribution model and are subject to ongoing assessment by De Beers and stakeholder feedback.