The polishing factories in Botswana and Namibia, subsidiaries of the De Beers mining partnerships with the governments of these countries, are in the process of being sold to select manufacturing sightholders.

Partly because of pressures by the European Competition Authorities, which doesn't like to see De Beers competing with its own clients, De Beers has decided to go back to its core business of mining and marketing rough diamonds.

It always had been somewhat of a "reluctant manufacturer", having resisted the establishment of cutting factories in producing countries for many years. The NamGem factory in Namibia, which enjoys export processing zone status, has been operating since 1998. Two Israeli manufacturing sightholders are considered by De Beers as new owners.

The Teemane plant in Serowe, Botswana, has been offered to a major Antwerp-based Indian manufacturer and to another Antwerp company, better known for its rough dealing operations. [We'll refrain from publishing the names for a few more days, as we don't want to intervene in ongoing commercial negotiations.]

The respective governments of these producer countries, who have stakes in these factories through the Debswana and NamDeb mining operations, need to approve the new owners. As De Beers has steadfast refused to supply directly from the mines, these factories will continue to get their supply from London.

Teemane processes mostly sawn 3-6 grainers. It is isn't clear whether the new owners are simply being handpicked by De Beers, or whether there is some kind of internal tender process going on. One senior De Beers official suggested that any party interested in purchasing these factories ought to contact De Beers Director Peter Somner, who, for all practical purposes, acts as Chief Auctioneer in charge of selling off the diamond plants.

The factories have - so far -- never been profitable. Though new buyers will be assured rough supplies from London, there are no assurances that money will be made. But as domestic value-added creation is important to the De Beers governmental mining partners, it is our guess that De Beers will certainly be able to keep the new owners happy even in the absence of clear profitability.