Diamonds and De Beers.
Dear Phillip,
The following is from Charles Wyatt's minesite.
Regards,
Crudestope.
DE BEERS RUNS INTO MORE TROUBLE WITH THE VALUATOR AND THE GOVERNMENT
What a right old mess De Beers has got itself into. Back in April the newly appointed diamond valuator for the South African government, DVIC Valuations, headed by Claude Nobels, started to throw its weight around by refusing to sign off the parcels of diamonds exported by De Beers to the CSO in London.
Eventually a compromise was hammered out on this , but it took all of three months. Now the valuator is at it again with Series "97" which is the ninth export batch of the year. This time it is not just an argument over value. It has widened to include to include a demand that De Beers should pay the costs of the valuator and return the diamond stockpile held in London to South Africa. And already there are stories that the next batch, which is just about ready for export, will also run into problems.
It is a form of guerilla warfare and Hilton Ashton, the diamond industry analyst at BoE Securities in Johannesburg reckons that it will affect the De Beers results this year . Accordingly he has changed his recommendation on the shares from Buy to Hold.
Time and again we have suggested that the traditional arrogance with which De Beers has treated suppliers, customers and the new government may rebound upon it. It only needed a valuator not in its pocket to set things in motion. The valuator?s excuse is twofold. First, he wants to do a job and not simply be treated as a cipher by De Beers and secondly, the SA Diamond Board, which is his paymaster, is bust.
In the background there is the suspicion that Nicky Oppenheimer upset government ministers more than a bit with his recent speech to delegates at the Commonwealth Business Forum at which he said that De Beers was considering suspending diamond buying operations in west and central Africa where civil wars are financed by diamonds. All very noble, but it implies that De Beers can play God in Africa. How does this go down with the black population who remember the Mau-Mau, Swapo and the ANC? All were rebels, and all came to power.
19 Nov 1999 |
