B.C. court will hear lawsuit against De Beers

VANCOUVER - A B.C. court will hear a lawsuit that accuses international diamond cartel De Beers and several other defendants of price-fixing.

In a ruling posted on the court website Thursday, B.C. Supreme Court Judge Brenda Brown ruled against De Beers and several other defendants, deciding her court does have jurisdiction to hear a lawsuit alleging a conspiracy to drive up the price of gem-trade diamonds.

Gem-trade diamonds are natural diamonds and are used as gem stones in jewellery and for investment.

Michelle Fairhurst, a resident of Squamish, B.C., filed the lawsuit alleging the defendants suppressed and eliminated competition in B.C.'s diamond trade by fixing the price of gem-trade diamonds at artificially high levels and allocating share, harming buyers as a result.

The allegations have not been proven in court.

The defendants wanted the case dismissed, arguing that they don't operate in B.C. and that Fairhurst didn't properly plead a conspiracy.

De Beers and the other defendants also argued their only commercial sales are of rough diamonds, which are diamonds that have been mined but not processed and are sold to customers in London, England, or to South Africa's state diamond trader.

Brown, however, sided with Fairhurst following a two-day hearing in January.

"The plaintiff has properly pleaded harm in British Columbia arising from the alleged wrongdoing on the part of the defendants," wrote Brown in her ruling. "The diamonds were sold in British Columbia through normal distribution channels."

The companies did not suggest that their diamonds were not sold in B.C., the judge noted in her written ruling.

"The diamonds arrived in British Columbia in the ordinary course of De Beers' business, and the defendants knew or ought to have known that the product would be sold in British Columbia."

Court documents specifically list as defendants Anglo American PLC, Central Holdings Limited, S.A., De Beers Canada Inc., DB Investments, Inc., De Beers S.A., De Beers Consolidated Mines Ltd., The Diamond Trading Company Limited, CSO Valuations A.G. and De Beers Centenary A.G.

Nobody from De Beers Canada's Yellowknife office was immediately available for comment.

According to the De Beers Canada website, the company produces about 40 per cent of the world's supply of rough diamonds and has been active in Canada for about 50 years.

The company has one advanced exploration project, two producing mines and plans for more exploration within Canada.