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Last Updated: Wednesday, 14 July, 2004, 08:24 GMT 09:24 UK
De Beers settles price-fix charge
Examining an uncut diamond
De Beers had sales of $5.5bn in 2003
The lucrative US diamond market has fully opened up to De Beers after the resolution of a price-fixing case.

The company pleaded guilty on Tuesday to conspiring to fix industrial diamond prices in 1991 and 1992 and agreed to pay a $10m (5.4m) fine.

The settlement means De Beers will now be able to operate directly in the US.

Until now the firm has had to use intermediaries in the US going back to just after World War II when it was first charged with price fixing.

The US industrial diamonds market is worth an estimated $500m.

"That's a pretty big market to give up and not be actively involved in," said anti-trust lawyer John Majoras.

Relieved

It reflects the department's persistence in the fight against illegal price fixing
R. Hewitt Pate, Department of Justice

De Beers' general counsel, Glenn Turner said the company was happy to have the case resolved.

Prosecution of De Beers has been difficult as US officials have no jurisdiction over the company, which is based in South Africa.

"The guilty plea reflects the department's persistence in the fight against illegal price fixing," said R. Hewitt Pate, assistant attorney general for the Department of Justice in Washington.

General Electric, one of the world's biggest companies, was also charged but US district attorney George Smith dismissed the charges against GE saying the government had failed to prove its case.

Critical time

The United States makes up around half of the worldwide diamond market which is currently valued by experts at around $30bn.

The case comes at a difficult time in the diamond market and reflects the US Justice Department's persistence in the fight against price fixing.

There is also a lot of work being done to try to stamp out illegal trafficking in diamonds.

In Europe sales of the stones have dropped by up to 20% since 1994.


SEE ALSO:
Diamonds to get 'ethical' label
23 Jun 04  |  Business
De Beers culls diamond outlets
09 Jun 03  |  Business
Diamond market faces tough year
06 Feb 03  |  Business


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