The Anglo American Plc unit has told customers they can refuse to buy half of the stones offered that are smaller than three-quarters of a carat, according to people familiar with the situation, who asked not to be identified as the matter is private. Buyers will also get the option to sell back some diamonds to De Beers on favorable terms, the people said.
This year, buyers have grown increasingly frustrated with the cost of rough diamonds sold by De Beers as the prices of polished gems slumped. The company’s first-half profit dropped about 30% as sales declined.
De Beers has responded by letting sightholders lower their annual quotas and defer purchases. Chief Executive Officer Bruce Cleaver said last month that he accepts it’s not an easy time for clients, but that the company sees no structural problems in the industry.
In the sale next week, De Beers will let so-called buybacks increase to 20%, the people said, meaning sightholders can remove up to a fifth of the diamonds in a box and De Beers will lower the price by a similar amount. The measure could allow buyers to increase profits since the rejected stones tend to offer the slimmest margins.
An oversupply of smaller stones at the bottom end of the market has led to the collapse in the value of many smaller diamond producers.