12 July 2000

Following the conclusion of its strategic review last year, De Beers today unveiled a package of measures, called ‘Supplier of Choice’, that is set to grow demand for diamonds and protect the consumer by establishing globally recognised distribution channels.

The strategy will equip De Beers’ clients to drive consumer demand more effectively. It will ensure more rough diamonds reach the clients that are able to distribute and market them most efficiently.

"To be the ‘Supplier of Choice’ in a world of great opportunity, De Beers will provide the best value-added service to clients and, through them, their downstream partners. We believe that this strategy will make our DTC marketing arm the first choice for rough diamonds," said the Chairman of De Beers, Mr Nicky Oppenheimer.

"We aim to encourage the development of a competitive and growth oriented 21st century industry able to meet the changing needs of consumers globally," he said. "To do this, we all need to become more customer focused and recognise the power of marketing to sell more diamonds."

"There’s a huge untapped opportunity for all of us in the industry to grow the diamond business and match the growth rates enjoyed by leading luxury goods companies. That sector has demonstrated that brands are a catalyst for growth," said Managing Director of De Beers, Mr Gary Ralfe.

DE BEERS TRANSFORMS THE DIAMOND INDUSTRY - PAGE 2

The luxury goods market is growing at ten per cent per annum and typically spends six to ten per cent of sales revenue on marketing compared to the diamond jewellery industry, which spends little more than one per cent of revenue.

"To grasp the opportunity for long-term growth, we need to transform the way we do business. We want to work in partnership with our clients - our sightholders - to create a dynamic, competitive and customer focused diamond industry. This ‘Supplier of Choice’ strategy will put our business in a more robust position to face the challenges of the twenty-first century," Mr Ralfe said.

The four cornerstones of the Supplier of Choice strategy are a powerful new identity, a package of value-added services, the establishment of a code of professional and ethical standards called best practice principles and the introduction of a policy statement.

• A powerful new identity under the initials DTC (the Diamond Trading Company, the marketing arm of De Beers) and incorporating the universally recognised slogan ‘A Diamond is Forever’. The DTC identity will be supported by the continuation of the Group’s commitment to an international marketing campaign which this year amounts to US$170 million. The new identity will help drive demand for all diamonds. It will also reinforce DTC sightholders as the leading diamantaires of the world operating within globally recognised distribution channels for diamonds in which consumers can be confident.

• An extensive package of world-class, value-added support services, including training, marketing and business planning support, market research and information and an extranet, will be available to sightholders.

• A set of best practice principles will be established to ensure continued consumer confidence in the allure and mystique of natural, untreated diamonds through the industry’s commitment to the highest professional and ethical standards.

The DTC is making it a condition of sale that its sightholders agree to comply with its best practice principles. This means customers in the distribution chain, as well as consumers, can be reassured that the diamonds they purchase have not been sourced from areas where this would support conflict, not being responsible for the exploitation of children and not being responsible for harming or endangering the health or welfare of individuals.

• For the first time, a policy statement will be introduced with objective operating criteria for sightholders emphasising efficient distribution and marketing abilities. A new sales planning system will refine the ability to supply the right diamonds to the leading diamantaires able to market and distribute them most efficiently. These changes will allow De Beers’ clients to improve services to their customers and plan their business more effectively. The result will be a greater focus by the industry on marketing and branding.

"While our core business will remain the mining and marketing of rough diamonds, in five years time we envisage an industry in which there are multiple and competitive brands. As we have learned from other industries, competing brands stimulate global demand. In due course, we hope that the De Beers brand will be one of those," said Mr Ralfe.

Mr Oppenheimer said, "This strategy represents one of the most significant developments the diamond industry has seen since the 1930s and places De Beers and its partners in a stronger position to meet the business and consumer challenges of the future."