De Beers said it has commenced the 2015 – 2018 Global Sightholder Sales (GSS) contracts with the updated qualification process aimed at increasing third party confidence in GSS customers’ corporate transparency and financial robustness.
According to the group, there will be two types of GSS customer in the 2015 – 2018 contract period namely the Sightholders and Accredited Buyers. The company noted that sightholders qualify for term contract supply (provided via the ‘Intention to Offer’ or ‘ITO’ planning process), which indicates the nature and value of rough diamonds De Beers anticipates being able to offer Sightholders across the forthcoming 12 month selling period.
On the other hand, Accredited Buyers have the opportunity to purchase rough diamonds on a more ad hoc basis via ‘ex-plan’ availability, which Sightholders can also purchase. The 2015-2016 selling period will commence with 84 Sightholders and two Accredited Buyers.
CEO of De Beers Group, Philippe Mellier, said the diamond industry is approaching a period of great opportunity and businesses need to be strategically well-positioned if they are to make the most of it.
“The approach to the new GSS contracts will support customers in this area by helping to identify them as bankable and resilient businesses. We believe that this can deliver real advantages in an increasingly competitive landscape,” said the Frenchman.
On the other hand, Paul Rowley, Executive Vice President of Global Sightholder Sales, added that they are delighted to start the new GSS 2015 – 2018 supply agreement.
“We feel we already have a compelling product and service offering, but when this is combined with the flexibility and simplicity of the distribution approach in the new supply agreement – in which customers have the potential to increase their share of our availability by demonstrating their demand for the different types of rough we sell – Sightholders and Accredited Buyers will be even better positioned for success in the short, medium and long term.”
According to De Beers, the updated GSS customer list will be published for the first Sight of the 2015 – 2018 supply agreement (which will take place from 4th May – 8th May 2015).
Diamond businesses that do not qualify as customers in the first annual ITO selling period of the 2015 – 2018 GSS supply agreement will have the opportunity to qualify as an Accredited Buyer at any point over the contract period, once they have met the compliance requirements. There will also continue to be an annual opportunity for applicants to qualify as Sightholders if they meet the compliance requirements and demonstrate sufficient demand for De Beers’ primary source rough diamonds over the prior reference period.
The new contract period has been designed to achieve this aim by: requiring customers to provide group accounts in line with International Financial Reporting Standards (IFRS) consolidation standards; requiring customers to achieve unqualified audit sign-off from a GSS-approved auditor on their financial data and requiring customers’ businesses to maintain a maximum debt to equity ratio.