De Beers Ends Agreement With Russia

De Beers, which controls world distribution of gem diamonds, terminated a purchasing contract with Russia, severing relations with a key member of one of the world’s longest-running cartels. Analysts said it was too soon to say whether the rift will prove temporary and that the lapse could take months to affect diamond prices, if that happens at all. That’s because Russian producers have been selling diamonds outside the contract for the last three years. Under the marketing arrangement, Russia sold more than $1 billion of rough, or uncut, diamonds a year through Johannesburg, South Africa-based De Beers’ central selling organization. The pact ended when the Russian government failed to approve a new agreement by the Dec. 31 deadline. Talks aimed at securing a new accord are expected to resume later this month.