Articles and News
De Beers CEO: ‘Despite Encouraging Signs, 2016 Likely To Be Volatile For Diamonds’ January 20, 2016 (0 comments)
London, United Kingdom—Philippe Mellier (left), CEO of the De Beers Group, warned sightholders yesterday that the diamond sector remains delicate and despite some recent encouraging signs, more volatility is likely in 2016.
Addressing a sightholder reception during the first sight of 2016, Mellier said, “We have seen polished diamond prices start to stabilize and even increase in certain areas, we have seen some encouraging early indications from holiday season sales in the US consumer market and we have seen greater trading activity than at the end of 2015.”
But he added, “There continues to be uncertainty regarding the macroeconomic outlook, currency pressures have the potential to weigh on downstream demand in a number of locations and we will need to see how retail restocking appetites develop.”
The challenges of 2015 were very different from the demand crisis that followed the 2008 downturn, but that does not mean they were any less difficult to deal with, especially for mid-stream diamond businesses, he said.
“We all had to take difficult decisions, considering trade-offs between what was right for our businesses and what was right for the industry. We all had to absorb the impact of negative trading conditions in the short-term so as to protect the industry’s long-term interests. And we all had to employ our hard-earned experience and expertise to navigate through some very difficult times.”
Mellier said De Beers will focus on both supply and demand. Supply-side actions will include a reorganization of the Global Sightholder Sales business unit, and on the demand side Mellier promised De Beers will continue to invest in non-proprietary marketing in 2016, “to ensure that consumers—young and old, eastern and western—continue to celebrate their own facet of forever with the magic of diamonds.”
A full copy of the speech is available here.
Separately, De Beers Consolidated Mines (DBCM) announced Thursday that it has completed the sale of Kimberley Mines (all assets, including the tailings mineral resource) to Ekapa Minerals (Pty) Limited, an investor consortium comprising Ekapa Mining (Pty) (50.1%) and Petra Diamonds Limited (49.9%).