ODC suspends diamond sales
The Okavango Diamond Company (ODC) has announced a temporary suspension of diamond sales in response to the global jewelry industry’s efforts to reduce inventory caused by decreased demand.
Market setback
The firms’ Managing Director, Mmetla Masire announced the halt and said the company has already cancelled its November auction, with a pending decision regarding December sale. Masire explained that there is a slow demand for cut and polished diamonds in major global markets and as a result they are trying to avoid releasing more goods into an already oversupplied market.
ODC holds 10 auctions each year to sell its 25% allocation of production from Debswana Diamond Company, which is a joint venture between Anglo American’s De Beers and Botswana, as per their gem sales agreement. Debswana produced approximately 24 million carats in the previous year, with ODC receiving an allocation of about 6 million carats.
There is a new agreement between De Beers and Botswana, which will increase ODC’s allocation to 7 million carats. ODC is also exploring the introduction of contract sales, a model used by De Beers for 90% of its supply, as well as new sales channels. The plan is to have two-year sales contracts and partner with a limited number of buyers to better serve them.
