The De Beers sightholder system
De Beers distributes its rough diamonds through its Diamond Trading Company (DTC), now operating primarily from Gaborone, Botswana, in a commitment to the Botswana government made as part of the country's diamond beneficiation programme. The sightholder system selects approximately 80 authorised buyers globally, primarily large diamond manufacturers and some major traders, who receive regular allocations of rough (De Beers Group, "The Sightholder System," debeersgroup.com; Botswana government beneficiation documentation).
Sightholders are chosen based on their technical capability, financial strength, compliance record, and business plans for adding value to the rough they purchase. De Beers conducts regular sightholder audits and has the right to withdraw sightholding status. The selection of sightholders and allocation sizes are De Beers decisions, not open-market negotiations. The system gives De Beers significant influence over who participates in the primary rough market and on what terms (De Beers Group documentation; industry analyses of sightholder system economics).
The open rough market: Rio Tinto, ALROSA (pre-sanctions), and independent producers
The open rough market, where diamonds trade between miners, traders, and manufacturers through negotiated transactions rather than the sight system, handles production from mines not contracted to De Beers. Before 2022, this included ALROSA's Russian production (approximately 30% of world rough by value); Rio Tinto's Diavik and (until its closure) Argyle production; Lucara Diamond's large stone production from the Karowe mine in Botswana; Petra Diamonds' South African production; and smaller producers across Africa and Canada (ALROSA Annual Reports pre-2022; Rio Tinto Annual Reports; Lucara Diamond Corp. disclosure documents).
The G7 sanctions on Russian diamonds from 2022 onwards removed ALROSA's production from the G7-accessible rough market, see the G7 diamond protocol article for full detail.
Rough price determination
Rough diamond prices are determined by the supply-demand balance for specific size, quality, and shape categories. The Rapaport rough price list provides a widely-referenced benchmark for common rough categories; for exceptional large stones, prices are determined by individual negotiation or tender. Rough prices must reflect the polished diamond value achievable from the rough, minus the cost of cutting and polishing plus the manufacturer's required margin. When polished prices fall, as they have for lab-grown and, recently, for natural polished, rough prices must follow or manufacturers cannot operate profitably (Rapaport Diamond Report, Rapaport Group; industry economics of rough-to-polished margin analysis).
Primary sources
De Beers Group sightholder system documentation. debeersgroup.com. [DTC/sight system mechanics; sightholder selection criteria; Gaborone operations; ~80 authorised sightholders; 10 sights per year.]
Kanfer, S. (1993). The Last Empire. Hodder & Stoughton, London. [Historical development of the sight system; CSO/DTC origin under Oppenheimer.]
Rapaport Diamond Report. Rapaport Group, New York. [Rough price benchmarks; polished price data; rough-to-polished margin analysis.]
ALROSA Annual Reports (pre-2022). alrosa.ru. [Russian rough production volumes and market share; open rough market participation.]