Good First Half & More Opportunities on Horizon

Bruce Cleaver
Bruce Cleaver

Gaborone: Last week Anglo American published its financial results for the first half of 2016. De Beers’ CEO Mr. Bruce Cleaver says, “At De Beers, we’re encouraged by our performance following the challenges faced in 2015. It shows the actions we took last year have succeeded in normalizing trading conditions.

First thing for me is a visit to India later this week, where I’ll be speaking at the International Jewellery Show in Mumbai.

I’m very much looking forward to this trip as India is a true diamond country with prospects across the entire pipeline.

It’s where diamonds were first discovered and has a large consumer market with high growth potential and, importantly, is at the heart of the industry’s midstream sector.

The visit will provide me with a great opportunity to meet key players from across the pipeline and to hear their views on the industry.

And just as India has interests through the value chain, so will our focus at De Beers in the second half of 2016 span the pipeline, as we have some exciting projects and activities to support our commercial prospects.

Looking upstream, we have two key projects close to completion that are crucially important to our own business and the futures of our producer country partners.

First up is Gahcho Kué, a new US$1 billion mine in Canada’s Northwest Terrorities.

Officially opening in the next couple of months, this is the largest diamond mine under construction anywhere in the world and has been in the making for almost 20 years.

In partnership with Mountain Province Diamonds, Gahcho Kué will deliver roughly 4.5 million carats each year over its anticipated 13 year life when it ramps up to full production in the first quarter of 2017.

To have arrived at this point on time, on budget and in such a difficult environment is a remarkable achievement by everyone involved.

However, in order to find the next big diamond mine, we have to know where to begin our hunt for diamonds.

More than 8,500 miles south-east of Gahcho Kué, in southern Africa, a new cutting-edge vessel will soon be undertaking this search.

The SS Nujoma is a N$2.3 billion diamond exploration and sampling vessel built for our Debmarine Namibia business.

With construction completed in Norway, it has set sail for the Port of Cape Town in South Africa for final outfitting prior to it beginning its all-important exploration for diamonds in Namibian waters next year.

Gahcho Kué and the SS Nujoma are just two very big examples of the work we’re doing to bring diamonds to consumers, but we’re also making progress in equally important areas.

In the midstream, we’re focusing on a number of projects that highlight our determination to seek out emerging opportunities and test their commercial viability.

In June, we began a pilot in De Beers Auction Sales that allows third-party companies to sell certain types of rough diamonds through our innovative online auction platform, as long as they adhere to our stringent trading standards.

The diamonds sold through this pilot will only represent a limited amount of what is sold on our platform but it gives us the chance to test the strength of demand for such a service.

With De Beers Auction Sales pioneering online auctions for diamonds, it’s pleasing to see the business demonstrating that it’s still an innovation leader in this space.

Meanwhile, in Global Sightholder Sales, important organizational design work continues apace to ensure that the business becomes even more customer-centric.

Heading downstream, in March we formally launched the International Institute of Diamond Valuation (IIDV) as a full commercial operation in the US, giving consumers a better experience when reselling their diamond jewellery.

The IIDV will provide consumers with more accurate and attractive prices, compared with what they’d receive in second-hand jewellery shops, as well as greater transparency in the reselling process.

We’re also continuing with some exciting developments in Forevermark, including launching a national television campaign in the US during the fourth quarter of the year featuring the Ever Us two-stone diamond collection.

We will also once again put our support behind category marketing to help stimulate consumer demand. I have said before that we need to be unrelenting in driving demand and we at De Beers will certainly be playing our part. So, a busy year in store, but all for good reason.

Volatility is the new normal, so the only way we can safeguard our success is to work to ensure effective activities across the pipeline, while continuing to support key areas – continuity of supply, midstream sustainability and downstream demand.

There are great opportunities on the horizon for the diamond sector and there is no time like the present to start work on capturing them.”