After 80 years of trading in London, diamond trader De Beers is closing its London auction rooms and moving them to Botswana, taking more than $5.89 billion in annual rough diamond sales back to Africa, according to a report in the DailyMail.

The company’s international sales operations, staffed by 85 out of its 300 London-based De Beers employees, are due to move to Gaborone, the Botswana capital, next month.

By separating sales from the London corporate headquarters, the move is arguably the biggest challenge De Beers has faced to the way it does business since the current sales model was set up nearly a century ago, the report said.

The company handpicks 80 buyers to buy rough gems from its mines under a system of pre-determined allocations and regular sales meetings known as “sights,” which from November will also be held in Africa.

De Beers’ London sights date back to the 1930s, when it set up what became the Diamond Trading Co. to control supply, secure demand and tighten its grip on the market in rough diamonds.

Until this month, the London sales meetings – at least 10 times a year – were interrupted only by heavy bombing during the Blitz.

The decision to move, made in 2011, will cost nearly £74 million, which includes new offices in Gaborone, and follows years of negotiations between Anglo-American-owned De Beers and Botswana, the largest producer of gem diamonds.

The move has been hailed as the end of an era. De Beers, founded by Cecil Rhodes in 1888, started trading in London towards the end of the 1930s.

Kieron Hodgson, equity analyst at Charles Stanley in London, said: “It is what you would call the end of an era, but it should not be seen as a negative, it should be seen as the natural progression of the industry.”

But RBC Capital Markets analyst Des Kilalea said: “I don’t think any of them really want to be (in Gaborone), but they don’t have a choice as the diamonds are in the ground there.

“It is blatantly inefficient – though in terms of politics and development, if I were president I’d do the same.”

The move secured a new 10-year contract for the sorting, valuing and sales of diamonds from the Botswana mines run by Debswana, a split venture between De Beers and the Southern African country’s government.

It will shift more than £3.7 billion of annual rough diamond sales from London to Gaborone.

Anglo American took over De Beers in 2012 after agreeing to buy the 40 percent stake from the Oppenheimer family in a £3.2billion deal.

The remaining 15 percent is owned by the Botswana government, which could exercise a right to raise its stake to 25 percent. Such a development would take Anglo’s stake back down to 75 percent, Anglo said.

De Beers has already moved its diamond sorting and aggregation businesses – the operations that sift through the production from each mine and bring the gems together before they are allocated to buyers – to Gaborone.

Veteran diamantaire Elliot Tannenbaum, founder of the Leo Schachter group, is one of the buyers picked by De Beers. “I have been coming here some 10 times a year for 35 years, I have missed only two or three sights. It is part of our routine,” he said.

De Beers has supported cutting and polishing operations by making more diamonds available locally – encouraging international firms like Tannenbaum’s to grow there. The Leo Schachter group now employs 300 people in Botswana.

De Beers has been battling lower production and challenges to its sales model for years, in part thanks the collapse of the Soviet Union and the emergence of mines in Australia and Canada outside the firm’s influence.

Its share of rough diamond sales dropped to under 50 percent in 2006 and to 37 percent in 2012, according to consultancy Bain. In 2009, it was overtaken in carat terms by Russia’s Alrosa.

De Beers says the move to Gaborone was partly motivated by wanting to keep alive the sights system, which still sells to buyers like jewellers Tiffany & Co and China’s Chow Tai Fook, and Indian family firms.

Varda Shine, who runs De Beers’ Global Sightholder Sales, said: “The Botswana government did not come to De Beers and say please transfer your business. 

“The Botswana government said, ‘We would like you to sell the Botswana diamonds here.

“We believe our business model is quite strong and provides value for De Beers and its shareholders – so we came up with the idea of moving the whole business.'”