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DTC Dec. Sight Est. $500M, 2007 Total -8%

Dec 5, 2007 8:15 AM   By Avi Krawitz
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RAPAPORT... Total estimated Diamond Trading Company (DTC) sight sales for year 2007 came in about 8 percent lower than 2006, according to figures compiled by Rapaport News.

December's sight underway this week, DTC's final offering of the year, was estimated at about $500 million. There were 10 sights during 2007 and according to Rapaport records, the total for the year was $6 billion.

One industry source, who is not one of 93 DTC sightholders, said the reason for the year's decline was two-fold. “Firstly, in 2006 DTC still sold stock it had held back in previous years, and it also had less supply from its agreement with ALROSA,” he said. “DTC relied much more this year on supply from its own mines and that will be the case moving forward.”

De Beers purchased  $600 million worth of rough from ALROSA in 2006 and agreed to phase out its purchases to zero for year 2009.

While DTC does not comment on sight estimates, spokesperson Louise Prior told Rapaport News that 2007 had been a successful year for the company “given the demand for rough in the market today.”

Prior noted that a number of milestones had been achieved for DTC during 2007, particularly in setting up DTC Namibia, which held its first sight in November, and DTC Botswana, which will start supplying rough in January.

Also significant for the company have been its preparations for the new three-year contract period which will start in April 2008.

While diamantaires will be informed whether their bids to be sightholders were successful on December 17, Prior said DTC would only make public the number of successful sightholders. The full list of successful applicants will be revealed once the new contract period starts, she said.

The new sightholder list has been the focus of attention at the DTC sights in the latter half of the year, and contributed to the subdued nature of this week’s activities.

“It’s usual for the December sight to be small,” said one observer. “Also, being two weeks before the 2008 sightholder announcement, people were more concerned about that.

At the December sight, there were no changes in price although observers noted better goods in the assortment, with more stones coming from Namibia and Russia, and fewer from Botswana.

Sightholders received their ITO’s (intention to offer) for the next three sights before the new contract period starts in April, which since they were based upon the ITO from the second half of 2007, produced no major changes.

Based upon the latest ITO, forecasters predicted that DTC would supply around $6 billion in 2008. 

The following estimated values (in millions) were given to DTC sights during the past two years:

                  2007 $Mil.              2006 $Mil.

Sight 1       $550 - $600          $600 - $650
Sight 2       $650 - $680          $640 - $680
Sight 3       $600                     $650 - $700
Sight 4       $580                     $685 - $720
Sight 5       $600 - $630          $690 - $710
Sight 6       $650                      $645 - $675
Sight 7       $650                      $720 - $750
Sight 8       $630 - $650          $680 - $720
Sight 9       $520 - $530          $680 - $720
Sight 10     $500                      $525 - $560

Total       $5,930 - $6,070    $6,435 - $6,790
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Tags: Alrosa, De Beers, DTC, Namibia, Russia, Sightholders, Sights
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