The DTC finds itself in an interesting situation in respect to its ITO (Intention to offer), which is the half yearly pro forma presented to customers detailing how much they can expect in the total of the following five Sights.

In the first six months of this year, the sightholders actually received far more than the DTC was committed under the ITO program. The mood was considered good.

In the second part of the year, even though a large polished overhang had emerged and the DTC openly expressed being puzzled about the huge polished intake in the American market while the retail sales were rather flat, the DTC offered, relatively speaking, more than its obligated amounts in the first two Sights.

As the boxes were being sold at a premium, the clients were happy to take those allocations. Now the DTC has a problem. The mood is definitely not as buoyant, and the next three Sights are expected to be much below the ITO level.

That, in turn, will again upset clients because they do like the goods, as long as they are profitable. So, at the end of the year, there will be a situation in which sightholders got more in the first half than they expected and less in the second half than the level of ITO's would have suggested.

We don't want to make too many interpretations out of this, except for the following: the desire for Sight boxes seems to be far more connected to the level of market premiums than to the mood of the market.

When there are premiums, the boxes are readily absorbed, irrespective of the retail markets. One way or another the ITO system is still in various phases of development and it is interesting to see whether indeed De Beers will stick to its overall targets for the year or will go beyond them, just in order to make the sightholders happy.

It's not easy material and certainly not a subject that can be done justice to in ten lines.