Even in the month of February mercury is falling down-n-down in the city of Mumbai! All these cold get began with this winter-season! Mumbai, the islet found warm-n-pleasant weather in general even in winter! Rarely, once in a blue moon could be so chilled say once in a century or half, that forced players to go warm-clothes and hot, that forced players to go warm-clothes and hot drink-n-eat! Many players had gone slower, fewer selected to stay in safe-room than to go on facing shaky weather & blowing in the street! Transactions slumped as cold translated in Mumbai!

Few mammoths preferred to rush London to join cocktail… there was a need of hard-drink to get ride the unusual cold-n-winter! Weather analysts told me not to worry about the environment of Mumbai, this unusual chilled is just a side-effect of snow-fall in northern India. Well weather savvy could not reply while I asked, then why to rush London & go cock tail over there? Somebody told me, I’m referring else cold & side effect! Few opined better I glance over DTC sight to understand the side effect!

Let’s glance over that sight!

The cock tail party-London:

The DTC Media release said: ‘At sparkling evening in London last evening, DTC sightholders listened to Nicky Oppenheimer, Gareth Penny, & Varda Shine as they spoke of the achievements DeBeers & the DTC had made in 2007, and the challenging & exciting year that lies ahead of us.’ Though, everybody was keen to listen these achievements perhaps, every player wanted to draw own conclusion! Whether they are in the party or not, virtually every Indian player wanted to that the end of the ‘Shaky-cold!’

…and Nicky delivered: ‘…it is important that you understand clearly where I stand in this whole process.’ He referred new contract period of April & the related process that led to some dramatic changes!

‘When I started in the diamond business there were no business plan proposals, allocations were in pounds sterling, there were no best practice principles to mention just a few things.’  Nicky said further: “Looking back over time the illusion is that the past was better than present, but there is never any merit in getting lost in the past & experience teaches us that unless you keep pace with an ever-changing business environment, you will be rum over by the crowd!”

In short Big brother said whatever is done in the past that was suitable to that time period may not be up to best practice principles get entered now… and therefore is very committed to the way forward is to be certain that ‘what we now do is honest, transparent & considerate to those who work with us & around us and that we all continue to aspire to live up to the diamond!’
Oppenheimer didn’t deliver the entire process of selection just he referred the new contract period & cliental list is fair! In these contexts said: “My role has been to make absolutely sure that everything was done right and that we did live up to the diamond.”

Everything done right:
In the recent process, where everything was done right yet, Nicky said: “I’m certain that is the case. The outcome has been that several close, personal friends of mine will no longer be buying diamonds directly from DeBeers when the new contract period starts.” Equally referred & also get expressed by Gareth: ‘…such preparation does not come without disruption & discomfort,’ “Yes, there will be continue to be some uncomfortable moments & hard decisions to make!” Successfully the delivered massage is, right now in the process, everything was done right & that will be the same practice, to the process! Varda Shine expressed the process widely… “I believe that the new sightholder contract was implemented fairly & objectively… applying the same rules to every applicant.” Strongly she said about the best practice principles: ‘I can sum up what we are offering in two words…partnership & excellence. What do we require in return? The same…there is a third requirement…and is accountability, (of) Financial, Professional & Ethical accountability”
And she referred ‘recent developments in Antwerp.’ Before that Varda said: “We are setting high standards for over-selves… and we expect you to share these standards.” Later Delivered: “The DTC has suspended supplies to those companies involved pending further investigation” “This is not about sending a massage but about living up to the ethical standards that we should all expect of 21st centaury companies…” “More important than that it is about that diamonds live up emotional value they represent to our customers.” All these presented, the cock tail party which took place on January 16!

Cold Wave:

Everything gone right in the London, everybody delivered ‘done right’ and let’s do all right! Everything above the board found right but undergone cold waves could be feeling in India. Including C. Mahendra Exports, fewer resolved to get warmth so to go London and the GJEPC called-up a press conference, ‘DeBeers move to affect Indian diamond industry adversely ‘on January 02’.
The multiple effects get created because of two; one is ‘suspensions’ & two, fear of getting fewer sightholders than the previous contract period! The GJEPC get expressed their concern as 11 sightholders pruned from DTC cliental was the coldest day in Mumbai. Another cold wave passed over the Mumbai on January 8, when DTC suspended supply from immediate effect to the players against whose names the Antwerp Judgment get announced on December 06’ 2007!

These all the frosty developed in the Mumbai during the December month. Let’s start from the point where, DTC completed the process for the period of 2008-2011.

The DTC Process:

Virtually entire diamond industry was keen to the out come of the process that carried on by DTC to select sight holders for the period of 2008-11, to get effective from March 31, 2008 until March 30, 2011.

Every media players get set to go breaking news and every player virtually started to accesses their all the sources including trade media. I think Rapapart break the news, said the selection process is over on December 17! Immediately DIB & rest on-line players started on releasing their reviews and market feed back!

Gareth Penny started greeting newly selected players in Media & Varda Shine said that the process have been through ‘Fair.’

Two major criteria seen being attributed to the DTC finalizations 1: BPP and 2: Beneficiation! Defacto every player know the diamond industry is transforming. Even though, the basic fundamental pushed away from the focus, list of selected & rejected sightholders get prime position in the focus and become talk of town. Rapapart started naming & listed 72 names in its 36th update flash on December 17 only! Immediately, impact-n-effect meaning & mileage, pros-n-cons of about process get started in the industry by applying various parameters-n-dimensions to draw own conclusion.

24 sightholders to stay up to March 2008 & rest 69 to run until March 2011 with newly announced six new names in the sum total of 75! According the completed process all together 79 establishments to get direct supply under the DTC’s global distribution system.

India feels Pruned:

Out of the dropped 24 players, India found 8 players of own land that set loss of equal to 33% share of total drop! India started feeling that they have lost 1/3 of the size! This 1/3 pressure would have been find of 20.86% if somebody must have added three new players are from India out of six-new!

Daily media said DTC lopped off several Indian players from their list! On the Natal eve daily media quoted Sanjay Kothari, Chairman GJEPC who said, on the outset, this would mean some loss of jobs for India. “The full impact has not been unfolded yet, but it would definitely affect our industry. With the players already investing heavily on integrated manufacturing facilities, cutting off assured supply will put them out of business for a while” TNN inked!

On January 02, the GJEPC said: DeBeers move to affect Indian diamond industry adversely. Feelings of get cut-to-size get extended, ‘…some of many years’ standing eight firms in India & three Indian owned firms in Belgium is eliminated! ‘The slash has been done in the name of short of rough that GJEPC estimates not over 10% but the impact of cut-in-the list & loss of eight sights may institute negative impact by almost of 25%!

According to chairman, GJEPC, “The concern is on the impact of DTC’s business decisions on the industry as a whole. This move by DTC will consolidate the business in few hands only, as small & medium enterprises depend for rough diamond supplies through intra-trade dealings, with sightholders will discontinue. This will lead to massive unemployment in the sector and will affect medium manufactures.” The expressed impact could have been reduced if the DTC would increase allocation to HDC. The GJEPC says, the act of pulling the plug on established companies just after having watched them invest huge amount in building infrastructure, may trigger-a massive loss of trust & business confidence throughout the industry. Those players, who could not get settled in the new list that lasts until 2008, will have to get to open market to source rough at higher price of about 10 to 20%!

Means, import of costly rough, strengthening Rupee, job cuts in the industry could obstruct growing pace. The lapidary industry in India have created jobs of about 1.5 lakh in rough processing that employs about 7.00 lakh people. The GJEPC estimates the severs scenario because, growing Rupee hinder import of rough by about 48% in November 2007 to worth $532.4mn against YoY of $906.2mn in ’06!
Resultant, about 1.5 lakh artisans lost their jobs, now; the cut, shrunken sightholder’s size in India that to get little rough and, by the end chain… more severe job cut & slow-down!

Players, those who were out of the list by the end of process, feel too freezing weather in Mumbai. Suresh Brothers & like so, immediately started shrinking & begin shutting down related units. Even Suresh Bros. didn’t wait up to the cocktail party, handed over the notice to shutdown the unit on December 31, 2007! Accordingly employee started searching job… where to go, whom to meet, who is warmer now, who could accommodate them…!

Defacto the diamond industry in India shocked-n-stunned! Every player started feeling ‘over-cold’ & over suffering when another cold-wave rocked over the Mumbai! The industry-India gets frozen, indeed the industry frozen on January 08, when the DTC suspended players on arrival of the judgment of Brenig Case! DTC played BPP!

Pot calling the Kettle black:

Right with the day, DTC completed the process; I started to draw my conclusion upon the global diamond industry. I was observing global canvas and pattern that started appearing but I pulled up to India, while the GJEPC said: ‘DeBeers move to affect Indian diamonds industry adversely.’ Expressed, the concern as 11 sight holders pruned from DTC clientele.’ Immediately I found surrounded by several questions and get cornered by the heading that released by the GJEPC!

I asked GJEPC, why? Why DeBeers move to affect so? My real question was about the policy! What policies have been adopted by DeBeers for India! Above and all I heard on January 08, DTC statement for the suspension! All the four (out of six!) players were selected in the recent process for the new contract period and were from India! On the spot this means, four more players to be deducted form the list of 79 & from 26 India’s players! Means, until 2008, India could have 34 players and just 22 could reach 2011 contract period!

Global media and analysts opened up many cupboards & drawers of DeBeers! Rob Bates put several questions: ‘what do you do with a company that has settled a money-laundering case? What do you do with a company deeply implicated in the GIA’ certificate fraud? What do you do with a company that was behind the (recent) smuggling of six kilos worth of Zimbabwe diamonds in to Europe concealed in the double bottom of an icebox & caught at Brussels airport? What do you do with a client who has been taken off the client list of another producer after being caught paying kickback to company salesman? What do you do with companies that consistently delay payments to suppliers beyond the agreed period?’ ‘As all today there are close to 40 sight holders that have operations in one or more southern African country, what do you do if any those companies are implicated on BPP grounds?’ Rob says, though theoretically, the DTC’s country partners are fully committed to BPP, it works out differently in practice! DTC’s hands are also tied by their African distribution partners. Overall question inked: ‘Are BPP totally dead?’

In real speaking the DTC suspended those who played in the mid of 1990’s where there were 32 suspects in the radius of Brenig case major players get out from the case by adopting settlement way get done out of the court! The court’s taken stand was not only to show their consent but also stop the player names to get released! How one can impose BPP, which get introduced by the DeBeers family in the year 2000 as ‘Diamond Best Practice Principles, upon the act done in 1990’s!

All most every day media targeted DeBeers. Chaim Even-Zohar expressed a right with ‘DTC Flight #79 not final’ & up to ‘BPP getting serious at last.’ Charles Wyndham, criticized the word ‘suspended’ that used by DTC: ‘As a result of the Antwerp criminal court judgment of 6th December 2007 relating to what has become knows as the ‘Brenig’ case, the DTC has communicated to a number of current sightholders that it is suspending supply to them, with immediate effect.’ Polished Prices quote so & Charles gets expressed back
on-line.

Charles also referred Jayam vs DTC as Chaim get referred!  Wyndham said: “DTC, and others who in their own ways wish to be seen to be holier then thou, but in the DTC’s case, with its BPP as part of its SoC, it has and continues to paint itself into a corner with its plethora of bureaucratic rules setting itself out to be some shining moral light.” “These rules are no more moral than catechism or rather moral works that have and continue to result in more disasters than virtually anything else!” “I find this suspension no clearer case of the pot calling the Kettle black’ than I have come across before.”

Mercury rose in Mumbai:

In Mumbai, the suspended players started reacting. One of the players C. Mahendra Exports Ltd. gets set to challenge DTC’s suspension! According to C. Mahendra, ‘categorically that neither C. Mahendra Exports Ltd nor any C. Mahendra’s affiliated company has or is in breach of any of the conditions laid down by the DTC BPP rules.” Strongly the company said: ‘C. Mahendra Exports Ltd challenges the suspension of its DTC sight holder status & vehemently defends itself against any suggestions of wrong doing or malpractice. The decision of the DTC to suspend supply has been taken without providing an opportunity to the company to defend.’ This said on January 14, 2008. That was also the last date to file a complaining against the DTC’s the process decision, therefore the mammoths, who have been missed the bus to travel up to 2011, were busy to get expressed to DTC. These all join the cocktail party-London!

In the party, Nicky Oppenheimer expressed a birds-eye view of DeBeers practice, policy and progress! Every practices of the past are not to be called ‘Best!’ As Chaim Even-Zohar said, ‘Oppenheimer must have worries about BPP in his mind about his African partners. The present Bostwana-case could weight much heavier than the Antwerp!’ Overall the party ended with warm environment! Exactly in a week, Louise Prior issued a release on January 23: ‘On 8 January, the DTC suspended supply to a number of sight holders following the Antwerp court of first instance judgment in the Brenig Case, pending further enquiries with the sight holders concerned.’

‘The DTC has now conducted interviews with the sight holder’s concerned. Considering each separate case on its merits, the DTC can confirm that it is lifting its suspension of supply to the sight holders concerned on confirmation, where relevant, that appropriate remedial action has been taken.’ Thus DTC lifted suspension! That means, once again the sum total of the sight holders from India reached 26 in the list of 79 these are the present sight holder up to March’08 & will play continue up to 2011! And the grand is of total 29 players will be in the list of 79 by adding 03, those who have been appointed newly from India.

DeBeers Policy for India:

Now before we move further let’s refer Varda Shine, M.D. DTC, AFNS quote her on February 05: ‘She denied that the company had deliberately targeted Indian companies when it recently cut its list of sight holder clients from 93 down to 79 for the new two and a half year contract period ending in 2011.’ Varda also added: ‘The quantity supplied to India will actually be the same as or even greater than before.’

Since the DTC completed the selection, Varda is saying that they have gone fair-n-square. Even in the party she said so. And, if even one glance over the fact and figures that says she is right! Say, out at 93, Indian sight holders total is of 34 that is about 36.56% share. Theoretically if the list is cut at 79 and if Indian share is 36.56% constant, allocation of Indian sight holders should be around at 28 or 29! I think the total number of Indian sight holders is 26+3 out of 79. That means, what Varda says is all right!

While Varda knows, she is right then why she started defending herself equally the simple calculation could have been worked out by any Indian then why Indian players feel that they have cut to size & again now the point is on 5th , why she said so? Or simply one has to believe that as soon as she noticed Indian sentiments she gets expressed! Is all these so simple! I think she must know Indian sentiment earlier especially when GJEPC organized the press conference on January 02! If so, she could have been said in the cocktail party that the company has not targeted Indian! And I said, theoretically she is right. If so, then why the GJEPC said: DeBeers move to affect adversely! Well, now the point is; where the target is & where do both the players fire. This is to understand what DTC has cut’& what may affect adversely. Therefore let’s understand little about DeBeers policy of in being. Let’s refer Nicky Oppenheimer: “While DeBeers may no longer the dominant player it once was and there are many new sources of rough diamonds for cutting centers be they Russia, BHP, Rio or the myriad players do not think for one second that we intend being anything other than the best diamond mining & marketing company in the world.” Delivered in cocktail party’08.
Varda Shine, “Helping our producer partners to achieve their legitimate aspirations to create sustainable downstream diamond industry in their country. I have heard questions asked about our policy towards our producer partners. But it is not a question of policy or even about doing what we feel is right. It is about facing our commercial realities…” Delivered in cocktail partry’08.

How domination could be achieved in diamond industry? That could be achieved by establishing the best mining & marketing company in the world! Controlling mining in the one hand and marketing in the other, the dominant qualities pass through monopoly!

I think D. Murali, in ‘Monopolies are forever’ quote Frederick Boyle- who injected the need of monopoly in 1871, now is in the being of DeBeers. Boyle inked: “You cannot drown the market with an article only appertaining to the highest luxury without swift & sudden catastrophe…”

Another writer Martin Meredith inked in ‘Diamonds, Gold and War’ that several attempts at amalgamation since been made. “Two companies had emerged by 1885 as the most likely nuclei for a diamond mining monopoly: Kimberley Central & DeBeers.” “Both set about crushing smaller rivals by producing as many diamonds as possible, in the other words of a standard bank  report, ‘Swamping them with production” “By September 1889, DeBeers achieved a complete monopoly of all Kimberly’s mines 90% of the world’s production.”

Along with the several policy-plays I think catastrophic policy paid DeBeers well. A catastrophic act put rivals under a catastrophe that cause in bearing rivals catatonia! In shorts, catastrophic led monopoly. Mining monopoly enabled DeBeers to hide-away rich diamond deposits and where some of these are located! And, marketing edge-up allowed the company, just how diamonds are fixed to make them more expensive! Now, in the 21 century the transforming diamond industry is not permitting to go strengthen monopoly. Say, how to manage monopoly need in a nerd situation! Yet, a force in being to go catastrophe against those who challenges monopoly policy!

‘Affect Adversely’:
That means something… ‘obstructed–wave’, must have been passed through the corporate psychology of DeBeers about India Else, why do they cut more players. Defacto while DTC cut eight players and added three to the list, though theory is right; but in number, indeed five players said that are less! Not only, this, while they cut three players from Antwerp; All together DTC could derive and calculate virtually a loss of eight players.

No need to say to DeBeers or DTC, collectively strength of eight sight holders in India is equal to what?!!!
No need to say a single line about huge-n-vibrant diamond market in India and the impact now! On the contrary I could believe that, the swift move is a part of policy, ‘let Indian diamond industry calculate the adverse effect!’ ‘Let cut’ players bears major investment losses on their mega expansion & investments which were undertaken to integrate manufacturing facilities while were sightholders!’ ‘Let those, who want to cut-n-polish diamonds in India, buy costly rough which may lead financial crunch if could not sale in order!’
Not only this, immediately deducted four more players under the BPP, the movement Brenig- judgment announced! Immediately Chaim Even Zahar inked on January 10; by referring similar case and after widely explaining ‘opschorting’ under the head: ‘Inconsistent behaviour by courts…’: “There is something else that bothers me. In these years, the DTC (then still called CSO) did similar book balancing, similar invoicing, exporting & re-importing of the same goods with different values. At some point tax authorities (in England) found out about it & levied a fine.”

No doubt, DTC lifted laid suspension, and India get four players back as a sightholders else, number of less sightholders could be 8+4 is equal to 12 players & a victim of catatonia!

But the question is why DeBeers move to affect Indian Diamond industry adversely? Why do they cut so?

DeBeers moved because:

It’s part of their policy. Even if Varda says, she has not done deliberately, is true…! But, theory is theory & action is action. Sometime action speaks louder than speech! Otherwise, everybody know the significance and strategic position of India to live up diamonds! No need to say a word about skill to strength, faceting to realize in a factual sale!

As on today Indians and the industry can’t think & don’t want to think, what if the ‘suspension’ was not lifted! What if in a second, the rough supply gets freezed by losing five plus four and three (Belgium) players! On the Macro view, I said Varda had cut proper percentage and in that way she could refuse that ‘Indian artisans may loose jobs!’

But, on the Micro view, immediately units get shut down. Again! Artisans are searching their boss who could accommodate! It’s a mobilization of over two lakhs of Artisans! I’m sure the three new players could not be able to absorb all these skills! I know them; they on the contrary will behave wisely! By viewing these all as, the chairman Sanjay Kothari -GJEPC said, “The concern is on the impact of DTC’s business decision on the industry as a whole.” The GJEPC said, suddenly pulling a plug triggers a massive loss of trust and business confidence throughout the industry!

Defacto, catastrophe thy name is to act sudden and a part of policy. It’s sever effect catatonia could lead victim a schizophrenia, that could affect on victim one, that could experience a period of unconsciousness or two, react over-active!

 Dilemma to India Diamonds:

I think in the era of BPP, DeBeers have just reacted not attacked, is my understanding on the issue of the ‘cut!’ But, it is sure, today Indian diamond industry is a victim of catatonia; let’s understand the past case history. Details could be read in the Book of ‘Glitter & Greed’ by Janine Roberts, published in the year 2003. Well she has inked huge about Indian diamond industry but, I wish to quote few lines:

“Despite the arrival of DeBeers in India around 1975, MMTC, the government owned company continued to try to get independent supplies throughout the 1980s.

In September 1987, they singed agreements with Ghana, Sierra Leone, Liberia, Tanzania & Angola for joint exploration & mining rights.

This alarmed the CSO, so in 1988, it shaked 20 Indian sightholders, including several whom had joined with the MMTC in seeking non-cartel supplies of diamonds.”    #374                            

 Since then, Indian diamond industry gone unconscious’! In the year 2006, get back consciousness, about 61, diamond companies including 16, DTC sight holders, 05-Rio Tinto select and 02 BHP clients formed a DIL (Diamond India Ltd) silently. Apart from the several aim-n-objectives one of aim & object get set to source rough directly from producers or mines! In the mean time the DIL source successfully the two auctions of Alrosa. Later in the IIJS-2007, the DIL inked MoU with Thai.  Prior to this MoU, it was declared that DIL could go inking producer nations or mines, initially invested of Rs. 2.25bn could be more by one or two billion  if they could source rough directly!

In the same duration period, Idex inked:

‘During the fifth sight of the year, DeBeers MD Gareth Penny caused quite a stir when he told sightholders that they would not receive any ex-plan goods (goods beyond their ITO-Intention to offer), and nor should they take any boxes they did not think were profitable. It was a moved welcomed by sight holders who were facing a tough year. Rough prices were high, polished prices gave sight holders just a small margin; companies were complaining that they were expected to invest heavily in marketing & to top it all off, bank interest rates were increasing.

And, the CSO, now known the DTC done almost same, what was done n 1988, have gone & pruned in 2008! Action replayed? Now, just wait-n-watch… again Indian diamond industry is going to unconsciouses or react hyper-active! Well, in both ways, show must go on… a growth chart must be maintained to go up! But this is about DTC side effect!