DeBeers eyes US market.

For the last 50 years the world's biggest diamond miner, Debeers has been banned from selling directly into the United States. Attitudes may be softening now and the company sees an outside chance it will be allowed back into the US in the near future. Tom Nevin reports.

De Beers, the world's biggest diamond miner, is making 'tentative' approaches to the United States Justice Department to end a 50-year ban on selling its gems on the American market. De Beers was prohibited from selling its diamonds in the US Soon after the end of World War II when it was accused of being an illegal price-fixing cartel because of its practice of stockpiling.

Earlier this year, De Beers took the decision to close down its Central Selling Organisation (CSO), until then the way most of the world's diamonds were bought and sold on the open market, and to sell off its stockpile.

The United States takes about half the world's diamonds each year and, according to Bloomberg, De Beers would need to win the right to operate there if it is to capitalise on its brand name and start selling its own branded gems to jewellers to boost earnings.

De Beers MD, Gary Ralfe, feels that the company has slipped into a mindset that accepts it's impossible for it to do business in the United States. "It seems to me," he says, that it should be reasonable for us, the new management of Dc Beers, to say: 'What are the problems, how do we try and cure them, is it worthwhile trying to cure them?"

As things stand today, De Beers can sell to American diamond traders and cutters outside the country. It cannot hold sales in the United States and cannot establish offices or operate there. In 1994, reports Bloomberg, De Beers was indicted in the United States, charged with fixing prices for industrial gems. The indictment still stands, preventing Ralfe and other executives from entering the US. "It's not the sort of De Beers I want to be running that has a criminal indictment against it in a jurisdiction as powerful as the United States," says Ralfe.

Where to from here?

So, now what? If De Beers has a master plan to rectify the situation, it's not saying. "Even though we have not had a physical presence in the US market, it still remains the largest retail market for diamond jewellery," Tracey Peterson, De Beers spokesman, told African Business. "As a multi-national company with stakeholders in the United States, De Beers would obviously like to be somewhat less constrained there."

Chairman Nicky Oppen-heimer says De Beers is looking at ways of getting back into American favour. "In the past, when anybody mentioned America to us, we simply did not even give it any thought. We passed on, we knew we could not do business in America and that was simply a tenet of faith.

"'What has come out of this legal audit is no greater clarity whether we will be able to do business in America or not, but a determination not just to say we cannot: we want to look at it, we want to examine it, we want to see if we can find lateral ways which would allow us to structure ourselves to be able to operate in America. We certainly believe if we could do that - and it is a very big if - that would be of interests of the American cutting industry and American consumer at retail."