Reports: EU to Approve De Beers, Alrosa Settlement

De Beers and Alrosa might see some of their worries end tomorrow, if the EU Competition Commission approves a proposed settlement agreement. According to reports in Reuters, Competition Commissioner Neelie Kroes is recommending the approval.

More than four years after De Beers and Alrosa signed a five year, $4 billion rough diamond sales agreement, the Commission might finally hand down its verdict on trade between the world's two biggest diamond miners.

According to a source quoted by Reuters, the 25-member Commission is expected to give its formal approval at its meeting tomorrow (Wednesday).

In December 2004, the companies proposed phasing down De Beers’ diamond buying from Alrosa over a period of six years. According to the settlement proposal, rough diamond purchasing will decrease from $700 million to $275 million by 2010.

The two companies found themselves under investigation by the EU due to the 2001 sales agreement.

Six months after the settlement proposition was made, the Commission sought comments from customers and competitors. According to Reuters, following this process, further concessions were made by the diamond miners.