Diamond giant De Beers is expanding the scope of its global auction sales arm to trial a service that sells polished diamonds from other firms.
This means midstream diamond firms, such as traders and manufacturers, can sell certain types of polished diamonds on De Beers' auction platform to others in the trade.
It is a business-to-business service and available for single stones that are over five carats in weight or fancy-coloured.
A STRINGENT PROCESS
To sell third-party rough diamonds, we've to fully understand all your credentials as a seller, where the stones have come from - which is provenance - to an industry-leading level, and we need to make sure the stone is natural and untreated.
MR NEIL VENTURA, Singapore-based executive vice-president of De Beers Auction Sales.
Mr Neil Ventura, the Singapore-based executive vice-president of De Beers Auction Sales, told The Straits Times yesterday that the move stemmed from another pilot programme selling rough diamonds from third parties that started in June .
Rough diamonds have to be cut and polished - mostly in India which cuts and polishes about 90 per cent of the world's diamonds - before achieving their flawless look.
De Beers Auction Sales has more than 900 customers and annual sales of about US$500 million (S$693 million).
Explaining the June programme, Mr Ventura said: "For many years, we've been steadily building the auction capability and customers were asking if they could sell some of their stones through our platform. If we do that, it's a departure because we're not selling De Beers diamonds.
"To sell third-party rough diamonds, we've to fully understand all your credentials as a seller, where the stones have come from - which is provenance - to an industry-leading level, and we need to make sure the stone is natural and untreated."
Currently, the auction sales team checks the diamonds thoroughly and requires evidence proving they have gone through the Kimberley Process, a global diamond certification scheme that ensures they come from conflict-free sources. This process will also be applied to the diamonds in the expanded service.
Mr Ventura said a diamond trading standard by De Beers is used.
Customers bid for diamonds from all over in online auctions with De Beers. Before each auction, diamonds offered for sale are shipped from Singapore for physical viewings by buyers in places including New York, Antwerp and Dubai, and the auction takes place soon after viewings are done.
De Beers started what it calls "single-unit online auctions" in 2008 and relocated the office to Singapore from Belgium in 2013, "part of a long-term strategic repositioning".
Since the auction sales business moved here, revenues have hit about US$1.3 billion.
Mr Ventura said: "We wanted to be in much greater proximity to customers in markets that are important today, but will be very important in the future."
Those include India, home to about half of its customers, Hong Kong and mainland China.