Under the terms of the pilot program, diamond miners, manufacturers and dealers can use De Beers’ online auction platform to find buyers for certain types of rough stones.
The service, which formally commenced 23 June, is open to third parties that meet De Beers’ Auction Sales Rough Diamond Trading Standard, a set of criteria designed to ensure rough diamonds sold are ethically sourced and not synthetic or treated.
As part of the stipulations, items must carry a Kimberley Process certificate, a World Diamond Council Warranty Declaration to prove they are conflict free and a provenance claim stating they meet De Beers auction sales’ source of origin requirements.
The service is limited to single rough diamonds more than five carats in weight or of fancy colour.
Neil Ventura, executive vice president of De Beers Auction Sales, said the “rigorous” criteria was aimed at boosting trading standards across the industry and added participating businesses would benefit from the company’s “innovative and well-established model”.
“While this pilot will only represent a very limited amount of what is sold on our platform, it gives us the opportunity to test the strength of demand for such a service,” he commented.
Once registered, third party sellers will select from different fee options depending on the degree of market exposure they want their products to receive.
This is followed by a “marketing roadshow” where registered buyers can place pre-bids over a number of days before a final auction is held.
Although approved diamond companies will be granted access to the website, a De Beers spokesperson told Jeweller auctions of third party sellers’ goods would be clearly listed as ‘service auctions’ and separated from De Beers’ merchandise.
No limit has been set on the number of participants that can take part in the scheme; however, the spokesperson said third party sales would represent a small proportion of the diamonds sold on the website.
Adjusting selling strategies
This initiative is the latest change to De Beers’ sales model.
The company sells around 90 per cent by value of its rough diamonds through its Global Sightholder Sales business, with the remaining 10 per cent offered to registered buyers via the online auction platform.
After years of restricting rough diamond supply to customers with sightholder status, in March 2015 the company increased the pool of rough diamonds available to “accredited buyers” outside its list of sightholders.
Andrew Bone, executive director of the Responsible Jewellery Council, welcomed the latest change and called it a “positive step”.
“It will not only encourage more businesses in the diamond sector to adopt more robust standards when carrying out their trading activities, but also ensure more companies provide evidence of their business integrity through third party assurance,” he explained.
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