Commodities and Agriculture: Oppenheimer to visit Moscow as diamond shake-up looms
MR HARRY Oppenheimer, whose family effectively controls the Anglo American Corporation of South Africa and De Beers, is to visit Russia next week at a time when the republic is considering a big shake-up in its diamond industry. His visit also comes at a time when the beleaguered diamond industry is rife with rumours about unofficial exports from Russia contributing to the present market turmoil which might force De Beers to cut its dividend payment this year. Some industry observers suggest that the presence in Russia of Mr Oppenheimer, who will be 84 in October, will be timely. 'It appears to be another sign that the former De Beers' chairman is taking a more active role in guiding the company through its current difficulties,' says the Diamantaire newsletter today. De Beers said yesterday that the visit by Mr Oppenheimer, accompanied by his son Nicholas, was a private one originally arranged for August last year but postponed because of the coup d'etat in the former Soviet Union. However, it admitted that Mr Oppenheimer would be meeting senior officials from the Russian diamond industry during his stay because he would be going to some of the big mines in Siberia and would be present when De Beers held the formal opening of its Moscow office on September 8. De Beers' London-based Central Selling Organisation, which controls about 80 per cent of world trade in rough (uncut) diamonds, in 1990 signed a Dollars 5bn, five-year sales contract with the former Soviet Union and at the same time advanced a loan of Dollars 1bn. Diamond stocks were moved from Moscow to London as collateral for the loan. After the break-up of the Soviet Union the contract was continued with Rosalmazzoloto, the Russian gold and diamond organisation, and an exclusive sales agreement was later signed with Yukutia, the area in eastern Siberia where most Russian diamonds are mined and which is now an autonomous republic in the Russian Federation. A CSO spokesman said yesterday: 'The Russian contract is working. Everything is normal.' Diamantaire points out that the Russian parliament is to consider next month a plan to set up a state diamond centre under the control of the finance ministry and Komdragmet, formerly know as Gokhran, the Moscow depository of diamonds. Reports suggest that the diamond centre would have exclusive rights to buy all rough diamonds mined in the Russian Federation and it would also have a monopoly of sorting gem diamonds. These proposals are being opposed by the Yakut government, which is backing a joint-stock company, Almazy Rossli (Diamonds of Russia), being set up with Mr Valery Rudakov, formerly in charge of Rosalmazzoloto, at its head. Rosalmazzoloto is to be broken up. Almazy Rossli proposes to bring all the diamond industry's operations under one roof, says Diamantaire. Observers expect Mr Oppenheimer to bring his formidable negotiating skills to bear to ensure that De Beers grip on the diamond market is in no way weakened by any changes in Russia. Meanwhile, the newsletter, which is available only to subscribers to Diamond International magazine, also says that reports in Antwerp suggest that two of the Belgian diamond trading organisations with which the CSO has a special relationship have been punished by temporarily being excluded from the CSO's 'sights' or diamond sales. The CSO invites only about 160 privileged merchants to its ten 'sights' a year in London, Lucerne and Kimberley. Diamantaire says that one of the Belgian organisations has had dealings with Russia for more than 20 years. Diamond International and Diamantaire, from CRU Publishing, 31 Mount Pleasant, London WC1X 0AD, UK.
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