What De Beers and Alrosa Clients Really Want

(diamonds.net) - Ask a De Beers or Alrosa contract client about the biggest problems with the miners’ age-old systems for selling rough, and the answer will probably include a comment on prices. High rough prices relative to polished have squeezed diamond manufacturers’ profit margins for years. But there’s a more complex issue behind the complaints: the lack of customization. The two mining giants sell most of their goods to fixed lists of customers that commit to buying certain quantities of rough in return for guaranteed supply. The stones traditionally come in prearranged boxes that clients can either take or refuse. Usually, each assortment contains diamonds the client wants and others it only buys to fulfill its contract. While De Beers and Alrosa have introduced some flexibility, the core reality remains: To get their hands on profitable rough, midstream players have to buy other goods that lack sufficient value.