De Beers diamonds –
subject of a new
parliamentary probe
 
Johannesburg, South Africa — MININGREVIEW.COM — 29 May 2008 – De Beers – the world’s biggest diamond producer – has welcomed a fresh South African parliamentary probe of allegations that the company exported a huge volume of diamonds during the mid-1990’s.

Reuters reports that De Beers – which is 45% owned by global mining giant Anglo American Plc – has come out strongly in favour of the investigation.

“We are ready to participate in this investigation completely and we have been ready to do so from the start,” said De Beers spokesman Tom Tweedy. “There was nothing extraordinary on the exports, and nothing was done out of the normal process of diamond exports.”

Tweedy reiterated that De Beers had taken part in a similar probe by another parliamentary organ last year, and had provided documents requested by a parliamentary sub-committee. “We understood it had been sorted out,” he said.

Some parliamentarians have alleged that De Beers exported gems to London in the period leading up to the black majority rule in South Africa — a time of massive capital flight and tax avoidance.

The recommendation to set up the team – contained in a public accounts committee report adopted by parliament – re-opens a long-standing dispute, which both De Beers and a senior South African government official said last year had been settled.

The team, assisted by South Africa’s auditor-general, would hope to determine the De Beers London stockpile records between the period December 3, 1992 and March 19, 1998, which a top official told Reuters amounted to about 1 billion rand.

At one stage, South Africa considered litigation to compel De Beers to pay a disputed 15% export tax on the shipment of 22 million carats of uncut diamonds to London in 1992. But De Beers has strenuously denied that exports in the mid-1990s were larger than normal, or that the company had benefited from improper exemptions of export duties.