EXPLORATION 1999 — Diamonds evaluated at Harry Oppenheimer House

Having reached a watershed diamond-marketing agreement, SouthernEra Resources (SUF-T) and De Beers Consolidated Mines (DBRS-Q) are putting aside their past differences in the name of pragmatism.

Under the agreement, SouthernEra will continue to have its share of Marsfontein and Klipspringer diamonds channeled through De Beers’ Harry Oppenheimer House (HOH), where all the rough diamonds produced or bought by De Beers in South Africa are sorted and evaluated.

The high-security HOH building, situated in Kimberley, represents the 1972 consolidation of three South African offices. While De Beers runs two similar facilities in Namibia and Botswana for diamonds produced or bought in those countries, De Beers diamonds from African countries outside South Africa, Namibia and Botswana are flown directly to London for sorting and evaluation.

The HOH processes about 10 million carats annually from 14 South African diamond mines, with production from Marsfontein representing about 10% of the total. SouthernEra will receive 10 evaluations per year, geared to De Beers’ 10 annual sales, or “sights,” held in the London, Lucerne and Johannesburg offices of the Central Selling Oraganisation (CSO). SouthernEra, like other companies in its position, is typically paid within two working days of a complete evaluation.

The diamonds come straight from the mines to HOH in sealed canisters. Here, for the first time, the seal is broken and the diamonds are cleaned and weighed individually. Sitting before floor-to-ceiling, south-facing windows, sorters examine each diamond and classify it into one of 14,000 price categories based on size, shape, color and clarity. To ensure that standards are kept high and consistent, the CSO and producers jointly hold master samples of representative diamonds.

Government sorters (often ex-De Beers personnel) then come in and verify the work to determine export duties and other taxes.

While some of the sorting has been automated, there is still a need for highly trained staff. “Unfortunately we haven’t developed a machine to take the place of the natural eye,” says HOH spokesman Angus Galloway.

Some 260 people work at the HOH, of whom 40% are sorters. Women, said to possess a keener eye than men, make up about 70% of the sorters. Galloway says that “artistically minded” people make the best diamond sorters and that the training period typically lasts three years.

De Beers takes on 6-12 new employees each year at HOH, and, under new employment-equity legislation, the company is required to boost the percentage of blacks on staff. The company provides newer employees with “life skills” courses to help them manage their personal finances and, seeking to retain its employees for life, De Beers also sends some of its employees on overseas junkets to help them become more cosmopolitan.

“People here have a pretty protected life, I suppose, but it is in our interest to have things organized this way,” says Galloway.

It takes about five weeks for a diamond to go through the entire sorting and evaluation process at HOH. From here, the rough diamonds are flown to De Beers’ London office, where they are mixed with production from the rest of the world and finally lose their identity as South African diamonds.

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