‘We have tightened standards for buyers’

De Beers, the world’s leading miner of rough diamonds, has tightened the selection criteria for authorised purchasers (‘sightholders’ in their parlance) of these, one result of the scam in the Indian industry, PAUL ROWLEY, its executive vice-president, tells Dilip Kumar Jha. Edited excerpts:

What is the major fallout of the recent scam in India's diamond industry?

We have made our due-diligence more stringent. Our sightholders are required to adhere to a comprehensive code of ethics, which we would be monitoring. It would ensure all of them achieve leading industry standards in terms of transparency, corporate strategy and governance, beside social, ethical and environmental compliance.

What about the financial standards?

We have some contractual requirements for 2017-18. Evidence from the International Federation of Red Cross and Red Crescent Societies (on the sourcing and conditions) and on the corporate structure for the entire sightholders group is required. We call for the annual consolidated financial statement for the entire sightholder group, expressed in IFRS or Ind-AS standards. Auditing is mandatory. Above all, we would concentrate on companies with a 70:30 ratio of debt to equity.

Your rough diamond production plan for 2018?

De Beers produced 33.45 million carats of roughs in 2017, a 22 per cent increase from 27.34 mn for 2016. Based on consistent demand from across the world, we estimate similar production for 2018.

Your forecast of rough diamond demand for the rest of the year?

It has been a bit stronger in the first quarter of calendar 2018. We expect this to continue for the rest of the year. For the long term, diamond demand will certainly outpace supply.

Has consistency in demand translated into some price increase this year?

Yes, some. In fact, polished diamond prices have been very encouraging, resulting in stronger rough prices as well. Hopefully, the trend would continue during the remaining three quarters of calendar 2018.

De Beers has been investing a lot on diamond promotion. What is your plan for 2018?

We invested $140 million on diamond promotion in 2017 for global markets. The same amount would be invested on promotion this year as well. Since India processes 70 per cent of the world’s diamonds by value and 90 per cent by volume, Indian processors would certainly get the benefit.