Diamond giant De Beers said its exports from South Africa have been stalled by a dispute with South Africa's diamond valuator. According to The Wall Street Journal, a De Beers spokesman said "there is a disagreement over the government valuator's opinion about the value of the goods."
This dispute is the third in 16 months. Last year, a prolonged disagreement between De Beers and the valuator halted the company's diamond exports for more than three months. The root of the disagreement is the differing methods the two use to value diamonds. De Beers bases the value on the price of diamonds it sells at the 10 sales it holds a year in the world's biggest diamond cutting centers, Bloomberg reports. The government valuator, DVIC Valuations, bases the value on the spot market price of gems sold outside of De Beers' sales.
If the delay continues, De Beers may be forced to meet customers' needs from mines it operates in other countries, which could lower its profits since it wholly owns the mines it runs in South Africa. Last year's delay caused the company's first-half earnings to fall 2.9%. This shipment is one of 10 De Beers makes from South Africa each year.
- by Julia M. Duncan