Last Sight of the Year Offers No Smiles

Sight 10 is ending today, early in the week and in the day. The reason is not just that there were fewer goods to offer (traditionally, the last Sight of the year is smaller) but also that the DTC team is setting aside time to prepare its VAS (Value Added Services) charges.

Sightholders pay about 1.8 percent of their semi-annual allocation for services they received, such as the ITO and marketing tools. DTC clients were reportedly in an unpleasant mood due to the VAS bill they were about to get.

All this in addition to the news they got last week from DTC Sales Director, Des Cavanagh, who informed Sightholders that their next ITO, the allocation in the first half of 2007, will be reduced.

While De Beers mining is not expected to slowdown, a number of changes are affecting it. Under an agreement with the EC, the diamond miner will be receiving fewer goods from Alrosa next year – down to $500 million worth of rough diamonds from $600 million in goods this year.

Another reason for the reduction is an agreement with Botswana that includes a requirement to leave a certain amount of goods in the country. This move will come at the expense of Sightholders who are receiving their allocation in London. Finally, mining activities in Canada are yet to go online.

Sightholders said they suffered from a tough year and many are concerned that the Holiday Season is not going as well as they had hoped for.

The Sight is estimated at about $550 million. Some Sightholders did leave goods on the table, although not as many as at past Sights.