The South African diamond group - that is 45% owned by mining conglomerate Anglo American plc - was fined the maximum $10m by US District Court Judge George Smith under the terms of the plea agreement on Tuesday.

The charge of fixing prices on industrial diamonds in 1991 and 1992 had previously been dismissed against De Beers' original co-defendant in the 1994 case, General Electric Co, for lack of evidence.

At the time, De Beers had refused to acknowledge US jurisdiction.

But the company's stance left representatives of the 124-year-old company, a dominant force in the global $55bn diamond industry, subject to arrest if they set foot in the US - the world's biggest diamond market.

It also forced De Beers, which had sales of $5.5bn and profits of $676m in the year ended in February, to use intermediaries to sell in the United States, where more than half the world's diamonds are purchased.

Normalisation

The guilty plea by a holding company, De Beers Centenary AG of Switzerland, was expected and appeared to end 60 years of anti-trust entanglements with the US Justice Department.

"Our desire is to be fully, legally compliant wherever we operate in the world," said De Beers spokeswoman Linda Dorrington in Toronto.

"We just want a clean slate."

"Our desire is to be
fully, legally compliant wherever we operate
in the world. We just want a clean slate"

Linda Dorrington,
De Beers spokeswoman

Judge Smith said there was no reason to assess additional fines because De Beers paid $26m a few years ago to settle civil suits related to the case.

Smith also declined to put the company on probation, saying, "the court does not want the mantle of responsibility to oversee the worldwide operations of De Beers".

New image

De Beers, which controls roughly half the global rough diamond market, has revamped its strategy in recent years and sought to remake its monopolistic image, said Martin Rapaport, publisher of the Diamond Report newsletter in New York.

The company, which went public in 2001, has sold off much of its $5bn inventory of rough diamonds and has won approval from the European Commission for its policy of being the diamond "supplier of choice" for a select group of distributors.

The company's goal, Rapaport said, has been achieved: More advertising paid for by compliant distributors has boosted demand for diamonds, helping to lift the prices of rough diamonds.

Prices

Prices for rough diamonds dug from mines around the world have risen by 15% so far this year, Rapaport said. The company has said diamond shortages have caused prices to rise.

While De Beers no longer dictates diamond prices by buying up lower-priced supplies around the world, the company is striving to boost demand through advertising and control supply by limiting the number of middlemen it deals with in the often insular industry, Rapaport said.

The planned opening of De Beers' first US retail store on New York's Fifth Avenue in a joint venture with French luxury goods company LVMH - Moet Hennessy Louis Vuitton - lent added impetus to resolving the anti-trust case.

The planned rollout of US retail outlets - another is planned in Los Angeles - was expected to spark a high-end retail battle and still more diamond advertising by rival Tiffany and Co.