Probe into De Beers shipments

JOHANNESBURG – The world’s biggest diamond producer, De Beers, denied yesterday it had improperly exported large quantities of gems in 1994 that were exempt from South African export duties.

Last week a South African parliamentary committee passed a resolution demanding a legal probe into De Beers shipments, saying there were sudden high volumes of exports during the period leading up to transfer of the country to black rule. Questions also arose regarding the full application of the process required to grant exemptions from a 15 per cent export duty, Gavin Woods, a leading member of parliament’s public accounts committee, told Reuters.”I want to refute upfront and categorically the slurs that have been made on De Beers’ reputation,” De Beers Managing Director Gary Ralfe told SAFM radio.”Firstly, the insinuation that we exported diamonds or obtained exemption from export duty in an improper way.Secondly, the allegation that we made an exceptional export of 19 million carats, quote, ‘ahead of the 1994 elections’, end quote.”Ralfe said De Beers’ records showed that exports in 1994 were 11 million carats, in line with South African production and not much different from the 10 million carats exported the previous year.”De Beers is a proudly South African company and an ardent champion of the new democratic South Africa,” he added.The firm, 45 per cent owned by Anglo American, also had records of the exemptions from duty it received from the South African Diamond Board, Ralfe said.De Beers and other South African diamond producers are eligible for an exemption from 15 percent of export duties under Section 59 of the country’s Diamond Act for gems that are offered to local cutters or to a diamond exchange.Under De Beers’ marketing programme, rough diamonds from South Africa are sent to London and combined with other global production, before being distributed as the “London Mix” to “sightholders”, specially chosen diamond traders and cutters.Under the Section 59 exemption, firms are allowed to export diamonds and bring back an equal amount of the type that can be cut profitably for the local industry.A proposed amendment to the Diamond Bill would shake up the distribution of South African diamonds, establishing a state diamond trading office aimed at providing more diamonds to local cutters.De Beers is responsible for nearly half of the world’s diamond supplies.- Nampa-ReutersQuestions also arose regarding the full application of the process required to grant exemptions from a 15 per cent export duty, Gavin Woods, a leading member of parliament’s public accounts committee, told Reuters.”I want to refute upfront and categorically the slurs that have been made on De Beers’ reputation,” De Beers Managing Director Gary Ralfe told SAFM radio.”Firstly, the insinuation that we exported diamonds or obtained exemption from export duty in an improper way.Secondly, the allegation that we made an exceptional export of 19 million carats, quote, ‘ahead of the 1994 elections’, end quote.”Ralfe said De Beers’ records showed that exports in 1994 were 11 million carats, in line with South African production and not much different from the 10 million carats exported the previous year.”De Beers is a proudly South African company and an ardent champion of the new democratic South Africa,” he added.The firm, 45 per cent owned by Anglo American, also had records of the exemptions from duty it received from the South African Diamond Board, Ralfe said.De Beers and other South African diamond producers are eligible for an exemption from 15 percent of export duties under Section 59 of the country’s Diamond Act for gems that are offered to local cutters or to a diamond exchange.Under De Beers’ marketing programme, rough diamonds from South Africa are sent to London and combined with other global production, before being distributed as the “London Mix” to “sightholders”, specially chosen diamond traders and cutters.Under the Section 59 exemption, firms are allowed to export diamonds and bring back an equal amount of the type that can be cut profitably for the local industry.A proposed amendment to the Diamond Bill would shake up the distribution of South African diamonds, establishing a state diamond trading office aimed at providing more diamonds to local cutters.De Beers is responsible for nearly half of the world’s diamond supplies.- Nampa-Reuters