Bruce Cleaver, former CEO at De Beers Group, has been appointed chair and independent non-executive director of Gemfields, the UK-based emerald and ruby miner.
He said the company, founded in 2005, was bringing sophistication to a fragmented and informal colored gemstone industry, much as De Beers did more than a century ago for diamonds.
Cleaver, 59, (pictured) served as De Beers CEO from 2016 until his resignation in February 2023, during which time the company launched its Lightbox range of lab growns and extended its diamond mining agreement with the Botswana government for a further 10 years.
“The parallels with De Beers’ origins and how consistent and reliable supply can deliver remarkable industry growth and positive contributions to communities, are clear to all,” he said.
“The coloured gemstone market has long transcended the arrival of their lab-grown counterparts, with lab-grown rubies having been around for more than 120 years.”
Gemfields operates the Kagem emerald mine and Montepuez, the world’s largest ruby mine, in Mozambique. It holds a 75 per cent stake in both.
Construction of a new processing plant at Montepuez, which will triple its throughput capacity, is due to complete in the first half of 2025.”
Gemfields reported near-record revenues of $262m for FY2023.
Cleaver will replace Martin Tolcher as chair, and Lumkile Mondi who was lead independent non-executive director, effective 1 July.
De Beers, which created the global market for diamond engagement rings through its “A Diamond is Forever” campaign, is shifting back to its marketing roots as its parent company Anglo American (LSE: AAL) moves to sell it off.
Its new ‘Origins’ strategy is part of a wider pivot back towards natural diamonds, announced on May 31. The move makes sense because marketing has always set the diamond sector apart from other mineral industries and the industry risks losing its way if it becomes focused only on mining and turns away from the demand creation side, New York City-based diamond analyst Paul Zimnisky told The Northern Miner.
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“Marketing is what moves the needle,” he said. “You can throw money at the problem, you can create demand if the products are marketed properly. You have to look at it as a luxury product, not as a commodity.”
In announcing the divestiture of De Beers on May 14, Anglo said the move would give both companies “a new level of strategic flexibility to maximize value” for Anglo American and the government of Botswana, which each hold 85% and 15% stakes, respectively, in the diamond company. The Botswana government also indicated on June 10 that it wants to increase its interest in De Beers. High capital needs and declining diamond supply present further challenges in the diamond sector, analysts say.
Anglo’s announcement of its De Beers plans, as well as plans to sell off its South Africa-based Anglo American Platinum (JSE: AMS) and its steelmaking coal assets was triggered by BHP’s (ASX: BHP) unsuccessful, multi-billion-dollar acquisition bid in mid-May.
‘Growing desire’ De Beers is also suspending its Element Six lab-grown diamonds (LGD) subsidiary for jewelry to focus instead on synthetic diamond technology for industrial applications, it said in May. Production for the Lightbox LGD brand will stop in a few months, De Beers CEO Al Cook said in a June 13 interview with diamond news site Rapaport.
“The outlook for natural diamonds is compelling,” Cook said in a news release, adding that the company’s new approach will involve “growing desire for natural diamonds through the reinvigoration of category marketing, embracing new approaches that maximize reach and impact.”
Cook explained to Rapaport the need to tell better diamond stories is greater now that “there are more diamonds above the surface of the Earth than below the surface. Every year, diamond mines are closing.”
De Beers first entered the synthetic diamond jewelry market in 2018. In setting up a solid difference between mined and lab-grown diamonds, the company initially offered Lightbox jewelry for up to 80% less than its competitors’ prices.
Slowing sales, production The stronger emphasis on marketing also comes as De Beers grapples with lower sales, with Cycle 4 rough diamond sales, at $380 million this year, down by 20% from last year’s Cycle 4 period of $479 million, the company reported on May 23. The Cycle 4 period approximately covers two weeks in May. Cook said the sales were due to the seasonally slower second quarter and less trading in India during the elections.
Production declined 8% to 31.9 million carats in 2023, from 34.6 million carats in 2022. First quarter output this year, at 6.8 million carats, was down 23% from the year-earlier figure of 8.9 million carats.
The wider industry is also facing the challenge of lower demand, especially in the United States and China. Amid the slow demand, De Beers cut the price of 0.75-carat stones by 4% to 6% at this year’s fourth trading session, according to a May 7 report from Rapaport. In the first sale of the year, the company cut prices by about 10%.
The issue of declining production could be expensive for De Beers to deal with, BMO Capital Markets diamonds analyst Raj Ray implied.
“From mining business point of view, not having a parent company like Anglo American backing De Beers could have some serious implications for diamond supply going forward,” he said.
Rough diamond supply has dropped to around 120 million carats from 150 million carats in 2017-2018, Ray said. It’s expected to drop even more in the next four to five years.
Amid the supply constraints, De Beers has invested $1 billion in expanding the life of its flagship Jwaneng mine in Botswana, and $2.3 billion to move underground the Venetia mine in South Africa.
“The next 12 to 24 months don’t look great for the rough diamond industry,” Ray said. “Anyone looking at De Beers will have to acknowledge (that). There’s huge capital investments that are needed over the next few years across mines to be able to maintain supply, forget about growing supply.”
But despite that hurdle, Ray and Zimnisky both see De Beers maintaining its 30% share of the global diamond market.
“They’ll continue to be the pre-eminent producer in the world,” Ray said. “Anyone who will buy (De Beers) will continue to fund its projects. I don’t see any significant drop in production from the De Beers portfolio.”
Going solo? Once De Beers formally leaves Anglo as part of the company’s restructuring, which CEO Duncan Wanblad has said could take 18 to 24 months to complete, the diamond miner will face the prospect of being purchased or going alone.
Zimnisky said either option has its own difficulties.
“This is something Anglo has wanted for a while,” he said. “They wanted Anglo to become more of a pure play copper producer, or a green infrastructure buildout commodity producer hoping it would lead to a higher valuation for the company. That said, De Beers is a complicated business and not easy to sell. It has (the) Debswana joint venture, which is the crown jewel of the company.”
Ray agrees that few potential buyers would have interest in a company like De Beers whose business requires massive capital investments. An IPO is also unlikely, he said.
“There’s little interest in the diamond sector from an equity perspective. I don’t see how in a potential IPO there’s enough interest in a new diamond story,” he said. “This has to be a private sale or consortium that needs to come in and take a longer-term view of the diamond sector. There could be growth expected in the retail segment. That’s where I think anyone taking a look at De Beers would see the value.”
Both analysts also see the De Beers sale having minimal impact on the junior exploration sector for diamonds.
“In order to stimulate exploration across the industry you would have to see a notable diamond price recovery,” Zimnisky said. “Prices have been flat for almost a decade now.”
De Beers has launched an ambitious five-year plan to become the premier jewelry brand worldwide, Diamond World reports.
CEO Al Cook aims to expand De Beers’ retail presence to compete with luxury giants like Tiffany and Cartier. Cook envisions transforming De Beers from a mining-focused company into a leading jewelry house, capitalizing on its rich legacy and market influence.
In an interview with the Financial Times, Cook said: “Diamonds’ future extends far beyond mining. I’m thrilled by the potential to execute our comprehensive strategy, aspiring to establish the world’s most prestigious jewelry maison—a vision that transcends traditional mining company boundaries.”
Central to this transformation is De Beers’ “Origins” strategy, which seeks to drive demand for mined diamonds by appealing to a new generation of consumers. This includes revitalizing marketing efforts and using innovative techniques to enhance the brand’s reach.
A key part of De Beers’ strategy is strengthening relationships with retail partners. Future plans include forming strategic alliances with major retailers, such as Signet Jewelers in the United States and Chow Tai Fook in China.
The Botswana government may raise its shareholding in global diamond miner De Beers, President Mokgweetsi Masisi told JCK News, after parent company Anglo American said it plans to spin off or sell the business.
The government owns a 15% stake in De Beers and Botswana accounts for 70% of the company’s annual rough diamond supply.
Anglo outlined a radical review of its business including a sale or divestment of the diamond business to focus on copper, iron ore and a fertilizer project in the UK to fend off a takeover from bigger rival BHP Group.
Masisi told JCK in Las Vegas that Anglo’s sale of De Beers would be “the best thing” if it happens.
The government could raise its shareholding in De Beers “if it’s attractive to,” Masisi told the online diamond news channel. The president in May told CNBC Africa that government would defend its interests in the diamond miner.
Among the plans Anglo could consider is an initial public offering for the diamond business, Reuters reported on May 14, citing sources.
Like other luxury goods, diamond prices have been hammered by a slump in global demand. De Beers has been limiting supply and offering flexibility to contracted customers. In February, Anglo announced a $1.6 billion impairment charge on De Beers. Anglo acquired De Beers in 2011, buying the Oppenheimer family’s 40% stake for $5.1 billion.
Masisi told JCK News Botswana’s ideal partner in De Beers would be a long-term investor. The government will try to keep the “bad guys out” and wants investors whose vision is aligned with the government’s.
“One of the characteristics of a bad owner is someone who has impatient capital,” Masisi said. “This industry requires somebody who is in it for the long-haul, because it has its ups and downs.”
According to Vantage Market Research the Global Lab Grown Diamonds Market Size is expected to reach a value of USD 27.2 Billion in 2023. The Lab Grown Diamonds Market is projected to showcase a CAGR of 9.1% from 2024 to 2032 and is estimated to be valued at USD 59.5 Billion by 2032.
The lab-grown diamonds market has emerged as a formidable force within the diamond industry, captivating consumers with its ethical and sustainable approach to creating stunning gemstones. Unlike mined diamonds, which are extracted from the earth through an environmentally impactful process, lab-grown diamonds are meticulously crafted in controlled laboratory environments.
This innovative technology replicates the natural diamond formation process, resulting in stones with the same physical, chemical, and optical properties as their mined counterparts. The burgeoning lab-grown diamond market is fueled by a confluence of factors, including rising environmental consciousness, evolving consumer preferences, technological advancements, and increasing disposable incomes.
De Beers Group announced late last week that it will be suspending production of diamonds for jewelry at its Lightbox factory in Gresham, Oregon, pivoting instead to industrial diamonds for technology applications.
The company made the announcement Friday, in the midst of the Las Vegas jewelry trade shows.
The lab-grown pivot is part of a broader new strategy called “Origins,” which is designed to grow desire for natural diamonds while cutting costs.
In an interview with National Jeweler on Friday, De Beers CEO Al Cook elaborated on the decision, including on the future of Lightbox, the lab-grown diamond jewelry brand De Beers launched six years ago.
“Element Six used to produce diamonds because they were hard and they could be used industrially,” he said. “Now, with the price of synthetic diamonds coming down, it opens up this amazing set of technological activities. We’re in partnership with … a number of high-tech companies looking at how you use diamonds as components in the digital era.
“That bit for us is really exciting. And that’s where the future of synthetic diamonds lies for us.”
Despite the transition at the factory, Cook said Lightbox will continue as a brand, drawing upon existing stock for the immediate future.
“At the moment, we’ve got a lot of stones available to Lightbox. Production will continue for a few months to ensure that they’ve got a stock of beautiful lab-grown diamond stones they can sell.”
After Lightbox depletes its existing stock, “we’ll see where the brand goes and we’ll see what happens,” Cook said. “I think it’s too early to say.”
De Beers announced the launch of the Lightbox lab-grown diamond brand during the Las Vegas shows in 2018.
At first, De Beers was growing the diamonds for Lightbox at its Element Six facility in the United Kingdom.
In October 2020, it opened its $94 million Lightbox factory in Gresham, a Portland suburb.
In an attempt to control the direction of the lab-grown diamond market, De Beers set an $800/carat price structure for the line.
It also marketed Lightbox as jewelry for less-special special occasions, like Sweet 16s or graduations, not milestones like engagements or anniversaries, which, it posits, should be celebrated with natural diamonds.
Since the line’s launch six years ago, lab-grown diamond prices have dropped precipitously. Lightbox cut its prices by as much as 40 percent last month.
Cook said De Beers expects the trend to continue.
“For a lot of retailers out there, the incentive to sell natural [diamonds] and the incentive to sell lab-grown are reversed. There was a period of time, a year-plus ago, when retailers got more of a margin sometimes from selling lab-grown diamonds.
“They were cheap to manufacture, and they could be sold as near-equivalents to natural diamonds. We didn’t do that in De Beers Group. We made very clear through Lightbox that these were two entirely different propositions,” he said.
“Not everyone followed our approach. It is now very clear that for all the retailers I can speak to here at JCK, the margin you get by selling a natural diamond is far greater than the margin that you get by selling a lab-grown diamond. It’s also clear that the gap is going to grow rather than shrink. We expect the price of lab-grown diamonds to go down and down, to continue collapsing.”
As it transitions production at the Lightbox factory in Gresham, De Beers announced Friday that it also will be consolidating its Element Six chemical vapor deposition (CVD) diamond-growing facilities, going from three factories to the one factory in Oregon.
Lab grown diamonds are a threat to Botswana’s economic lifeblood, says the country’s president Mokgweetsi Masisi.
He was speaking to reporters on Wednesday (29 May) ahead of the first phase in a $6bn project to extend the life of Jwaneng, its flagship diamond mine.
“If lab grown diamonds take our space, then you and I are finished,” he said. He pledged to wage “a peaceful assault against lab grown diamonds, to give confidence to our partners and dampen any attraction to lab growns.”
He was departing for JCK in Las Vegas, where he also said he’d be lobbying the US over G7 sanctions on Russia that route all EU diamonds through a single entry point in Antwerp.
Meanwhile work is about to start to start of the first phase of the Jwaneng development, a establish a drilling platform at a cost of $1bn.
It began commercial operation in 1982 as an open pit operation run by Debswana, a 50:50 joint venture between De Beers and the Botswana government.
Open pit operations are expected to end in 2032 but underground mining could extend Jwaneng’s life to 2050 or beyond.
It currently represents about 40 per cent of De Beers total production (10.3m carats in 2022).
Three quarters of Debswana’s production is currently sold by De Beers. But under a new deal agreed last June, the state-owned Okavango Diamond Company (ODC) will see its share increase over the next decade from 25 per cent to 50 per cent.
Anglo American, the $30.7 billion British multinational mining company, just announced plans to divest De Beers, its diamond mining and jewelry subsidiary. Ango American holds an 85% interest in De Beers and the government of Botswana owns the minority share.
“Anglo American is now exploring the full range of options to separate the business in order to set it up for success in unlocking full value, “ Anglo American CEO Duncan Wanblad said in a presentation earlier this week. “This will give both Anglo American and De Beers a new level of strategic flexibility to maximize value for both company’s shareholders.”
Anglo American is fighting a takeover bid from BHP Group, reported by Reuters to be the world’s largest mining company. In a move to shore up the company’s overall value, Anglo American will focus on its cooper, premium iron ore and crop nutrients businesses. Also slated to be divested is its Anglo American Platinum business, both of which will bring profound changes to the roughly $300 billion global jewelry industry.
Advising that Anglo American is considering a number of options for De Beers, be it a sale or IPO, and that it is still working through logistics with Botswana, Wanblad said, “It is a great business and it has fantastic assets and it has an exceptional brands. And therefore on that basis, it really deserves to be together on that set of criteria. How we do this is going to be a journey.”
De Beers CEO Al Cook is more than ready for the next phase of that journey. “For 124 of our 136 years of existence, Anglo American didn’t own the majority of De Beers,” he shared in an exclusive interview from Botswana. Anglo American acquired its majority stake in 2011.
As part of efforts to provide increased provenance across the diamond industry, De Beers plans to bring the first non-De Beers Group goods onto its Tracr platform this year.
The Tracr platform uses blockchain, AI, the Internet of Things and advanced security and privacy technology to track a diamond’s journey from where it is mined and throughout the value chain, providing consumers tamper-proof assurance of where the diamond comes from.
“Our leadership in diamond transparency and traceability continued throughout 2023, underpinned by leading technologies, so that we can increasingly connect consumers with the provenance of their natural diamond and all the benefits it has delivered along its journey,” De Beers CEO Al Cook says in an update to shareholders on the group’s ‘Building Forever’ sustainability goals.
In its ‘Building Forever 2023 Sustainability Report’, published on May 8, De Beers reflects on the sustainability goals it has achieved.
This includes having engaged 5 000 women and girls in science, technology, engineering and mathematics – two years ahead of schedule.
Further, De Beers has agreed to establish a flagship Diamonds for Development Fund, in Botswana; progress key renewable energy projects in support of its emission reduction targets; and scale the development of Tracr.
De Beers reports that it is now registering more than two-thirds of its global production by value on the platform, with 1.5-million individual diamonds registered on the platform during 2023, bringing the total registered on Tracr to two million.
De Beers also opened up the platform to the wider industry, with a number of prominent marketplaces and laboratories, including the Gemological Institute of America and Gemological Science International having joined the platform.
Further, De Beers announced a collaboration with diamond traceability technology company Sarine to focus on recording technologically assured, rough-to-polished diamond traceability, without the need for further physical verification, the diamond miner notes in its sustainability report.
“Tracr and Sarine technology is open to users across the industry and will focus on making digital access to information on diamonds available to Group of 7 officials,” the report states.
In addition, De Beers also launched a “substantially uplifted” Pipeline Integrity (PI) standard, that includes higher expectations and a new melee supplement. The PI standard sets the key criteria for demonstrating segregation and traceability of eligible diamonds from non-eligible diamonds.
“It assesses each entity in the chain of custody, from the point of rough purchase through to the polished sorting office, to help ensure the management systems, policies and procedures are in place to segregate and reconcile eligible diamonds from non-eligible diamonds,” De Beers explains.
In 2023, the group expanded the scope of participants in the PI programme to Tracr participants involved in the handling or the manufacturing process who register polished eligible diamonds on the platform.
This expansion in scope resulted in a 16% increase in the number of entities required to participate in PI, compared with 2022.
Each entity participating in the PI programme must conduct an annual self-assessment and undergo a third-party assessment by SGS – De Beers’ chosen external verifier.
Meanwhile, De Beers is also progressing renewable-energy projects at its operations as part of its emissions reduction efforts.
“We continue our efforts to reduce our carbon footprint in line with our recently validated science-based emission reduction targets and are progressing investments in renewable energy to power our operations,” Cook says.
De Beers has entered into an agreement with Envusa Energy – a joint venture between its parent company Anglo American and EDF Renewables – to wheel 48 MW of wind and solar generated electricity to the Venetia mine, in Limpopo, South Africa, from 2025.
The diamond miner has also completed a prefeasibility study into a 50 MW on-site solar plant to be built at Venetia. A feasibility study into the project is under way and expected to be completed by mid-2025.
Further, De Beers has progressed plans for the development of a 34 MW wind farm at subsidiary Namdeb’s land-based operations, in Namibia. A feasibility study is under way.
In Botswana, Debswana is exploring renewable energy supply options to be developed in partnership with the Botswana Power Corporation or independent power producers.
It also held an inaugural Scope 3 supplier summit, mandating carbon reporting for the company’s sightholders and securing commitments with key suppliers to work on aligned greenhouse gas (GHG) reduction roadmaps.
De Beers has set a target of achieving a 42% decrease in its absolute Scope 1 and Scope 2 GHG emissions, as well as a 25% decrease in its absolute Scope 3 GHG emissions by 2030, with 2021 set as the baseline year.
A passenger at an airport in India was caught with almost 1kg (2.2lbs) of gold, most of it concealed inside their body.
They were intercepted at Bir Tikendrajit International Airport, Imphal, in the northeastern state of Manipur, after a specific tip-off.
Customs officers recovered one packet of gold, in a paste form, within the airport complex, and found two more hidden inside the passenger’s body after a thorough examination.
The gold packets were shaped like eggs, wrapped in rubber sheaths and were found hidden inside the passenger’s rectum.
The passenger has not been identified, and Customs did not say where they’d traveled from.
The total weight of the gold was 972.28 grams, with a market value of Rs 70,31,601 ($84,000).
