Market NewsComment'Cock and Bull'

'Cock and Bull'

By Charles Wyndham.

Its ‘Dear John’ time again, or I can be more precise and say ‘Dear Sightholder’.

Howard Davies in his role as Manager, Commercial and Services has written to the lucky few who are going to be part of the new three year Supplier of Choice contract which starts from next month.

It was I thought going to be at the last Sight that a comprehensive list of those that remain in the family of Sightholders was going to be made public.

Nothing has happened of which I am aware but that is bye the bye, let’s enjoy Howard’s missive which some thoughtful people have sent to me, asking me if I understood it.

Following on from the fabricated data that Howard produced at the Jayam vs DTC case, I am a bit cautious in even trying to interpret what he says.

Poring over his missive like some Dead Sea scroll to try and make sense loses its fun if there is the fear that it is entirely based on his imagination, I like leaving those parts to myself.

Anyway, Howard is pleased to confirm that “in all cases, every box that was announced in December….will indeed be offered.”

This despite in “a large majority of cases the precise value of supply offered will differ to some extent…”

In particular Howard focuses on the impact of the power shortage in South Africa which has caused DTC to revise its forecasts.

All makes sense to me up to this point, I am just surprised that so much should be made about DTC being able to offer the boxes they said they would in December.

Now we move into a superlative world of obfuscation.

He continues: “The new figures have affected individual boxes in different ways, some boxes have increased others have decreased.”

This I find strange but it could be the consequence of the presumption that the power cuts will be affecting different mines in varying degrees of intensity; as clearly if, for example, a presumption is that there will a 10% reduction in production because of power cuts across the board, it is not the content of boxes that will be affected but the overall availability of all boxes and presumably fairly pro rata.

Without this being clearly explained the only logical explanation to me is that DTC has or is deliberately going to change the make up of the boxes.

There must have been some leeway given to the DTC given the price increases already this year, which of course should have added to the availability?

Now we get to more interesting points raised by Howard.

“Also”, Howard writes, “in running the ITO figures based on the new availabilities, there have been some rare instances of the mathematics of our risk management system, which balance the spread of allocations between Sightholders, leading to certain Sightholders ITO’s being marginally increased even in boxes where the overall trend is downwards.”


Firstly, why are Sightholders treated to a “risk management system” to allocate their Sights?

Oh well, so be it, but what is this bit about the mathematics’?

If it is so “rare” and the result so “marginal” why bother sending the letter in the first place?

This really is the most splendid example of bureaucratic gobbledygook that I have come across for some time, where whatever the motives maybe, there is a huge amount of time and effort being taken to ensure that no one understands what the hell is going on.

Congratulations, Howard.

But this is not even the end.

He treats us to the statement: “It is in the nature of diamonds, as a scarce and natural product, for their future to be inherently difficult to predict.”

Thankfully he has taken the trouble to exclude synthetics from the equation.

What is surely more to the point about the new De Beers are the much touted skills in predicting their availability.

I have read more than one gushing eulogy about this from various head honchos from the company.

Well Howard seems to be saying that this is yet another ‘cock and bull’ story.

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