What is a rough diamond tender
A tender is a formal competitive sale mechanism in which a seller presents goods to multiple potential buyers and invites sealed bids, selling to the highest bidder. In the diamond industry, rough tenders are used when the price of a stone or parcel is sufficiently uncertain, or sufficiently large, that the seller believes open competition will generate more value than a pre-agreed price.
The basic logic of a tender is that different buyers have different assessments of value. A rough diamond's value is not a fixed number: it depends on the yield (how many polished stones of what quality will the rough produce), which in turn depends on the technical skill of the cutter, the specific markets and sizes they serve, and their operational efficiency. A cutter who specialises in large, premium stones and has a client network buying them will value a large rough diamond differently than a cutter who primarily produces smaller commercial-grade polished. The tender process allows this diversity of assessment to establish the price through competition.
Tenders vary in scale from single extraordinary stones (a 1,000+ carat Type IIa recovered from Botswana) to parcels of many hundreds of similar small stones. Large single-stone tenders attract international attention and provide the most transparent price signal available for exceptional rough. Parcel tenders for smaller stones are more routine and less widely reported but constitute a significant portion of global rough trading.
A competitive sealed-bid sale process for rough diamonds. The seller presents stones or parcels to qualified buyers during a viewing period (typically 1–10 days). Buyers examine the goods and submit sealed bids by a deadline. The seller typically sells to the highest bidder (reserve price may apply). Used by producers who believe competitive bidding better reflects market value than fixed prices, especially for unique, large, or difficult-to-price stones. Contrasts with the De Beers sight system where prices are set unilaterally by the seller.
How a tender works: step by step
A typical rough diamond tender follows a structured process that balances seller price maximisation with buyer ability to assess value accurately.
The process begins with the announcement of the tender: the producer notifies qualified buyers that a tender will be held, specifying the viewing location, viewing dates, bidding deadline, and general description of what is being offered. Qualified buyers are typically established rough diamond dealers, cutting houses, and manufacturers who have registered with the producer and demonstrated financial standing and technical capability.
During the viewing period, qualified buyers travel to the viewing location and examine the goods under controlled conditions. Single exceptional stones are typically available for examination by appointment, with each buyer allocated a defined time slot. Buyers bring their own tools: loupes, proportional calculators, planners' software, and years of expertise in assessing rough yield. They map inclusions, identify cleavage planes, calculate possible cutting plans, and estimate the polished yield in terms of sizes and qualities.
By the bidding deadline, each qualified buyer submits a sealed bid: a specific price per carat or a total price, depending on the tender's format. The seller (or their representative) opens all bids simultaneously after the deadline. The stone or parcel is sold to the highest bidder, subject to any reserve price the seller has set. If no bid exceeds the reserve, the seller may choose to retain the goods for a subsequent tender or direct sale.
The identity of the winning bidder is typically not publicly disclosed, nor is the winning price in most cases, though exceptional results for extraordinary stones sometimes become known through press releases or industry reporting. The confidentiality reflects both the bidder's preference for privacy and the seller's interest in not establishing a public price anchor that might disadvantage them in future tenders.
Who uses tenders and for what
Not all producers use tenders equally. The choice between fixed-price contract sales (like De Beers' sight system) and competitive tenders reflects a producer's philosophy about price discovery and their assessment of how competitive bidding compares to their own pricing capability.
Small and medium producers with limited pricing infrastructure often prefer tenders because they lack the De Beers-scale ability to set prices independently. A junior mining company in Angola or Zimbabwe producing a few hundred thousand carats per year does not have De Beers' market intelligence and pricing team. A tender lets the market set the price.
Large producers with exceptional stones use tenders even when they have fixed-price sales systems for their regular production. De Beers will tender exceptional individual stones that fall outside the parameters of its sight system. The Cullinan Diamond itself, in 1905, was sold by tender (though the mechanism was less formalised than modern tenders). Lucara Diamond, despite being a relatively small producer by volume, has become famous for its tender process for exceptional stones from the Karowe mine.
ALROSA uses a combination of long-term contracts, fixed-price sales, and tenders. Parcels of rough that ALROSA wishes to sell competitively, or specific exceptional stones, are tendered. Before the 2022 sanctions, ALROSA held regular tenders in Antwerp, Mumbai, and Dubai that attracted significant participation from Indian cutting houses.
Lucara Diamond and the Clara platform
Lucara Diamond Corporation, operator of the Karowe mine in Botswana, has become one of the most watched rough diamond producers in the world because of the exceptional stones Karowe has consistently produced. The mine has yielded more than 30 diamonds above 300 carats, including the 1,758-carat Sewelô (2019), the 1,111-carat Lesedi La Rona (2015), and numerous stones in the 300 to 800 carat range.
For these exceptional stones, Lucara developed a partnership with HB Antwerp, an innovative diamond manufacturer and technology company, to create Clara, a digital rough diamond trading platform that uses AI-assisted planning and transparent data to match rough diamonds with cutters who can best maximise their value. Clara shares detailed data on each stone, 3D scan data, inclusion mapping, proposed cutting plans, with registered buyers, allowing more informed bidding than traditional physical-only viewings permit.
The Clara platform represents a significant innovation in rough diamond trading: moving from opaque sealed bids based on physical inspection to a data-rich process where the seller and buyer share detailed information about the rough's potential. Lucara reports that Clara consistently achieves prices above what traditional tender processes achieve for equivalent stones, which it attributes to the more informed bidding that detailed planning data enables. Source: Lucara Diamond Corporation annual reports and Clara press releases (lucaradiamond.com, claradiamond.com).
The Karowe mine taps a South Lobe kimberlite that appears to have unusual geological characteristics: its mantle source produced a high proportion of large, inclusion-light Type IIa diamonds compared to most kimberlite pipes globally. The high frequency of exceptional stones from Karowe is not random variation but reflects the specific geological character of the pipe's mantle source, the same phenomenon that made the Cullinan pipe the world's most famous source of large stones. Source: Lucara Diamond Corporation geological reports.
ALROSA tenders: the Russian dimension
ALROSA, the world's largest rough diamond producer by volume, historically sold through a combination of long-term contracts (with major sightholders, primarily from Belgium and India), spot market sales, and periodic tenders for specific parcels or exceptional stones. ALROSA's tender programme was an important source of rough for Surat's cutting industry before 2022.
The Russian invasion of Ukraine in February 2022 and the subsequent G7 sanctions have dramatically disrupted ALROSA's tender programme for Western markets. As of mid-2026, ALROSA cannot directly sell rough into G7 countries. Its tenders and direct sales have shifted toward non-G7 markets: India (which did not join Western sanctions), Dubai, and non-G7 Asian markets.
India's position is nuanced. India has not imposed sanctions on Russia and Indian cutting houses continued purchasing Russian rough through 2022 and 2023. However, the G7 Diamond Protocol's January 2024 verification requirement means that polished diamonds produced from Russian rough cannot easily enter G7 consumer markets without disclosure, which creates a market access problem for Indian exporters selling to the US and EU. The resulting supply chain complications are ongoing as of mid-2026 and represent the largest structural disruption to the global rough diamond trade since De Beers' market share declined in the 1990s.
Indian buyers in rough tenders
India's large cutting houses, the same companies that hold De Beers sightholder status, are active participants in rough tenders from multiple producers. For exceptional large stones above approximately 10 to 20 carats, Indian houses compete with Israeli, Belgian, and New York cutters for winning bids. For parcels of smaller commercial rough from African producers, Indian houses are the dominant bidders because Surat's cost structure makes Indian cutters the most economical processors for this material.
The major Surat cutting companies that participate in rough tenders include names such as Rosy Blue, Kiran Gems, Hari Krishna Exports, Venus Jewel, and Shrenuj. These companies have rough buying offices in Antwerp, Mumbai (BDB), and Dubai, and maintain relationships with producers across Africa, Russia (historically), Canada, and Australia. Their bidding capabilities are sophisticated: they employ rough planners and yield analysts whose job is to assess rough parcels and calculate maximum value recovery.
Indian participation in tenders has been complicated since 2022 by the Russian origin question. Indian houses must now assess whether rough of uncertain or Russian origin can be processed and sold into G7 markets, which requires either avoiding Russian rough entirely for G7-destined production or implementing traceability systems that can distinguish Russian-origin polished from non-Russian. This has added compliance costs and uncertainty to the tender participation calculus for Indian buyers.
Tender vs sight system: two philosophies
The tender and the sight system represent fundamentally different assumptions about where pricing knowledge resides.
The sight system assumes that the seller (De Beers) has superior pricing knowledge. De Beers sets prices based on its deep market intelligence, its knowledge of rough diamond supply and polished diamond demand, and its long experience in the market. Sightholders accept these prices because they trust De Beers' pricing capability or because access to De Beers' rough supply is worth accepting a price premium over what an open market might establish.
The tender system assumes that the market has better pricing knowledge than any single seller. By inviting multiple qualified buyers to bid competitively, the tender aggregates the diverse assessments of the most knowledgeable buyers in the world and finds the market-clearing price. The seller benefits from this aggregated intelligence and should, in principle, achieve the best possible price.
In practice, both systems coexist because they serve different needs. The sight system creates price stability, reliable supply for sightholders, and inventory management capability for De Beers. The tender system creates maximum price discovery for individual stones or parcels where competitive bidding adds more value than price stability.
What tender results signal about the market
Tender results, when reported, are among the most transparent price signals available in the opaque rough diamond market. A tender result for a specific stone or parcel tells market participants: this is what the most informed buyers in the world, competing against each other, were willing to pay for this material on this date.
For exceptional single stones, the tender result establishes a data point that affects expectations for future stones of similar size and quality. A Lucara 500-carat stone achieving a strong price tells the market that demand for large rough from high-quality mines is healthy. A disappointing result for a similar stone signals weaker demand or more cautious buyer assessment of polished yield prospects.
For parcel tenders, the per-carat prices achieved reflect market sentiment for rough of specific size distributions and quality profiles. Rising tender prices signal healthy polished demand and confidence in manufacturing margins. Falling tender prices signal the reverse: dealers who can no longer make acceptable margins on polished will not bid aggressively for rough, and prices fall until the economics improve or inventory clears.
This is the upstream signal that eventually flows downstream to polished dealers and retailers. When rough tender prices are strong, polished prices will be sustained or strengthened over the following months as the processed rough enters the polished market. When rough tender prices weaken, polished price pressure typically follows within three to six months, the time it takes for cut and polished stones to work through the pipeline from Surat to retail. Understanding this dynamic helps explain why diamond prices at retail sometimes seem disconnected from immediate consumer demand: the prices were effectively set months earlier when the rough was purchased.
Sources and data integrity note
Lucara Diamond Corporation tender procedures and Clara platform: Lucara Diamond Corporation annual reports and press releases (lucaradiamond.com); HB Antwerp company documentation (hbantwerp.com).
Sewelô (1,758-carat) and Lesedi La Rona (1,111-carat) discoveries: Lucara Diamond Corporation press releases.
ALROSA sales mechanisms and sanctions disruption: ALROSA annual reports; G7 Diamond Protocol documentation; Rapaport Magazine market intelligence reports (rapaport.com).
India cutting house names (Rosy Blue, Kiran Gems, etc.) are publicly known industry participants documented in trade publications and GJEPC data.
Frequently asked questions
Why don't all producers use tenders instead of fixed-price contracts?
Tenders maximise price for individual transactions but sacrifice planning certainty. A sightholder who buys from De Beers through the sight system knows in advance roughly what rough they will receive and at what price level, which allows them to plan factory utilisation, staffing, and customer commitments months ahead. A cutter who buys only through tenders faces uncertain supply in terms of timing, volume, and character of rough. The sight system's predictability has economic value to cutters that partially offsets any price premium De Beers extracts. Producers who value their customers' ability to plan ahead use fixed-price systems; those who primarily want maximum per-stone price use tenders.
What happens if no one bids above the reserve price?
The stone or parcel is unsold, and the producer typically has two options: re-tender the goods at a future date (hoping market conditions improve), reduce the reserve price and offer the goods through a direct negotiated sale, or in some cases retain the goods for potential later sale. Reserve prices are set based on the producer's assessment of the stone's value, which may differ from what the market is willing to pay at a given time. Unsold goods from tenders are a rare but documented occurrence, particularly for exceptional large stones where the valuation is most contested and the pool of credible bidders is smallest.
Can a small Indian cutting house participate in rough tenders?
Participation in major international rough tenders requires registration with the producing company, demonstrated financial standing (typically letters of credit or bank guarantees), and in some cases a track record of handling and paying for comparable goods. For large single-stone tenders of exceptional material, the pool of credible bidders worldwide is small: perhaps 20 to 50 companies globally who can assess and finance the purchase of a 300+ carat stone. Smaller Indian cutting houses typically access rough through their relationships with rough dealers and larger trading companies rather than by direct tender participation. The major Indian sightholders (Kiran Gems, Hari Krishna, Rosy Blue, etc.) are the primary Indian participants in international rough tenders.
How does the Clara platform change traditional tender bidding?
Clara provides detailed planning data, 3D scans, inclusion maps, proposed cutting plans, to registered buyers before bidding, rather than relying solely on buyers' own in-person assessments during a viewing period. This reduces the information asymmetry between buyers with more and less sophisticated planning capabilities, allows remote participation, and compresses the time needed to assess value. Lucara reports consistently stronger results through Clara than through traditional tenders for equivalent goods, which it attributes to buyers having more confidence in their bids when supported by the detailed planning data. The trade-off is that Clara requires more technology infrastructure and trust in the platform's data integrity, which has been Lucara's and HB Antwerp's specific focus in developing the system.
Trade section complete, continue exploring