According to Bruce Cleaver, the CEO of De Beers, natural diamond supply is expected to remain stable for the next few decades, providing reassurance to industry participants. Cleaver expressed his confidence in the medium- to long-term growth of the diamond industry in a recent interview with Reuters. He stated that there is no reason to believe that growth will not continue and that he feels more positive about the future than he has been in a long time.
Cleaver emphasized that the supply of natural diamonds will not experience a drastic decline. He predicted a stable supply for the next 20, 30, or even 40 years, which is why he remains optimistic. He also noted that the supply likely reached its peak in 2018-19.
The global diamond supply chain was significantly affected by the COVID-19 pandemic. Mines were forced to shut down, leading to a sharp decline in rough diamond trade. Polishers in India also faced job losses. In the second quarter of 2020, De Beers was able to sell only around 3% of the rough diamonds they typically sell. This was primarily due to limited production caused by concerns over miners working closely together and lower consumer demand as economies slowed down. However, towards the end of 2020, demand started to rally, resulting in increased polished prices and corresponding increases in rough prices.
The recovery in the market has been evident, with De Beers reporting sales of $4.82 billion in 2021, a significant improvement from $2.79 billion in 2020. To support future growth, the company has been actively engaged in exploration activities. De Beers recently applied to explore diamond deposits in north-eastern Angola following industry reforms in the country. The company is also exploring opportunities in Botswana, Canada, and South Africa. Additionally, De Beers conducted a survey of the ocean floor off Greenland’s coast to determine the presence of marine diamonds. However, Cleaver mentioned that it is still too early to determine the potential of the Greenland research.
Looking ahead, De Beers is focused on investing in Environmental, Social, and Governance (ESG) practices. Cleaver highlighted the importance of diamond traceability using blockchain technology and the company’s goal of achieving carbon neutrality by 2030. De Beers is also striving to implement better mining practices.
Cleaver’s positive outlook on the diamond industry’s future and the stability of natural diamond supply provide reassurance to market participants. The company’s recovery from the challenges posed by the pandemic, coupled with its commitment to sustainability and responsible mining practices, positions De Beers as a key player in the ongoing success of the diamond industry.
Useful Links:
1. De Beers explores diamond deposits in Angola
2. The Future of Forever – De Beers’ sustainability initiative
