Penny Re-Confirms Commitment to Supply Secondary Market
March 31, 04
In a letter to World Federation of Diamond Bourses President Shmuel Schnitzer, DTC’s Gareth Penny re-confirms the DTC’s commitment to supply the secondary market with $500 million worth of rough diamonds via Diamdel.
In the letter, Penny says he wants to clarify “a slight confusion” regarding De Beers' intentions, specifically in relation to the mechanism by which the DTC supply of rough to the Diamdels in 2004 is accomplished.
Penny says that following discussions with the EC De Beers decided on a framework for the Diamdels' operations and then reveals, for the first time, that allocation to Diamdel will not be set.
“Under the framework agreed in discussion with the Commission, the Diamdels are not treated as a Sightholder but receive an allocation of rough from the DTC, capped at a fixed proportion of the DTC's total sales,” he writes in the letter, later adding “its simply not the case that supplies to the Diamdel companies can be increased at will.”
Many in the industry, including WFDB President Shmuel Schnitzer, view the letter as a re-affirmation of DTC intentions, saying the above clause is mentioned due to legal necessities, and not as an escape route.
“The syndicate has every intention in fulfilling its commitment to the market,” says Schnitzer, adding the letter was sent to assert this.
The WFDB is going to hold an executive meeting in Antwerp on April 29 and hear from Derek Palmer clarifications and additional information regarding the Supplier of Choice policy.