These range from vulnerability to external shocks caused by changes in the diamond market and variable consumer demand, to the complex consequences of currency over-valuation.

Diamonds are also a finite resource. This means for any one deposit, diamond earnings will eventually plateau and decline.

While it is primarily the responsibility of government to manage the revenues generated from natural resources today to build a solid foundation for a strong economic future tomorrow, the Family of Companies can make a valuable contribution to this process.

We also understand the importance of good governance wherever we operate, in order to ensure these one time revenues are fairly invested and distributed within the economy.

We can assist our partner governments in meeting their economic diversification goals through, on the one hand, ensuring that their countries derive the maximum value from their resources by optimising mine profitability, finding new deposits and driving demand.

On the other, we can assist in the groundwork for developing more diversified economies through developing beneficiation opportunities, diligent closure planning, supporting other industries by procurement agreements, strategic social investment and direct support for enterprise development.

Beneficiation

Beneficiation is the process by which De Beers, through its sales and distribution arm, the Diamond Trading Company (DTC) and its government partners promote, develop and implement value-adding diamond related activities in producing countries. These activities include the sorting, valuing, cutting and polishing of rough diamonds, as well as citizen skills development in all aspects of the downstream supply chain to retail. Beneficiation aims to optimise the economic returns from diamond resources through national capacity building, increased employment, enhanced revenues, diversification, the fostering of a more conducive business environment and the attraction of ancillary economic activity in a sustainable manner.

Our beneficiation activities differentiate De Beers from any other company. Beneficiation forms a key part of our long-term economic sustainability strategy, as well as our overall value proposition to our host countries. It is a means by which to manage finite national diamond resources in order to ensure the development of a robust and broad-based postmining economy. The ability of host countries to compete with low-cost cutting and polishing centres such as India and China is to a large part reliant on the provision of robust governance, world class skills and facilities, and the maintenance of a favourable and responsible business environment.

In 2009, pressures associated with the global economic recession significantly challenged the sustainability of beneficiation. While the Family of Companies can help drive the process through regional investment and diamond sales, its ultimate success depends on attracting Sightholders and other companies involved in the diamond pipeline to invest in the diamond industries of our host countries. These companies faced serious commercial pressures throughout the year, including a fall in consumer demand, reduced liquidity and a shortage of available credit upon which they traditionally rely.

Read more about Beneficiation  >

The Family of Companies beneficiation programme in southern Africa is driven through three locally established distributors of rough diamonds: DTC Botswana (DTCB), Namibia DTC (NDTC) and DTC South Africa. Beneficiation is further supported in South Africa through the assistance we provide to the State Diamond Trader. Each of these entities promotes in-country wealth creation and skills development.

DTC Botswana

Incorporated: May 2006. Prior to the incorporation of DTC Botswana, sorting and valuations were undertaken in Botswana by the Botswana Diamond Valuing Company (BDVC)

Ownership: 50% joint venture with the Government of the Republic of Botswana (GRB)

Purpose: To sort and value Debswana’s production and make economically cuttable assortments of diamonds available for sale in Botswana for domestic cutting, polishing and manufacturing

Activities: Our objective is to supply US$550 million worth of rough diamonds (equivalent to about 3% of GDP) via this channel by the end of 2010. Discussions around the Debswana sales agreement, currently scheduled to end in 2011, are due to commence in 2010

Local Sightholders: 16

NDTC

Incorporated: January 2007. Prior to the incorporation of NDTC, sorting and valuations were conducted in Namibia by DTC Valuations Namibia
Ownership: 50% joint venture with the Government of the Republic of
Namibia (GRN)

Purpose: To make diamonds available for sale in Namibia for domestic manufacturing and to sort and value Namdeb’s diamond production as well as encouraging marketing practices

Activities: All of Namdeb’s production is sorted and valued at NDTC. A total of 10% by value of unaggregated Namdeb production is directly made available for sale to NDTC Sightholders together with a proportion of aggregated DTC International mix

Local Sightholders: 11

DTC South Africa

Established: DTC Valuations in South Africa was established in 1974.
In 2007, it was relaunched as DTC South Africa

Ownership: 100% De Beers controlled

Purpose: To sort and distribute rough diamonds locally, and to encourage the development ofdomestic cutting, polishing and jewellery manufacturing skills

Activities: About 50% of De Beers total production by value in South Africa is sold to the domestic cutting industry via DTC South Africa and the State Diamond Trader. In 2009, sales of rough diamonds to South African Sightholders and their Black Economic Empowerment (BEE) partners
amounted to US$264 million (2008: US$573 million, 2007: US$670 million)

Local Sightholders: 17

Canada

In 2009, diamonds worth a total of US$15.5 million were supplied for local manufacture in Canada. The DTC’s beneficiation activities in Ontario, Canada, began in February 2009 when Crossworks Manufacturing Ltd, based locally, was awarded Sightholder status. This followed the signing of a beneficiation agreement between De Beers Canada and the Government of Ontario in 2008. Under the 2008 agreement, 10% of production by value from the Victor mine is to be made available for manufacture within the province. DTC Sightholder Crossworks made its first purchase of rough diamonds in July 2009 and, in the long-term, is expected to create about
50 new jobs. A similar agreement is already in place in respect of our Snap Lake mine and the Government of the Northwest Territories.