NATURAL DIAMONDS NEWS – De Beers unveils “Origins” strategy; its Element Six business to suspend production of lab-grown diamonds for jewellery

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De Beers Group has unveiled its new “Origins” strategy to enhance value across its business from mining through to retail. The business will be streamlined and investments will be focused on high return projects in core upstream assets, midstream technologies, natural diamond retail and synthetic diamond technology solutions.

Furthermore, De Beers Group’s Element Six business will suspend production of lab-grown diamonds for jewellery and focus on its position as a world-leading provider of synthetic diamond technology solutions for industrial applications.

NATURAL DIAMONDS NEWS – De Beers unveils “Origins” strategy; its Element Six business to suspend production of lab-grown diamonds for jewellery

De Beers Venetia underground mine shaft, Limpopo, South Africa. Picture courtesy of De Beers

As the natural diamond market continues to recover, De Beers will harness its industry-leading portfolio of mining assets, its iconic retail brands and its track record of generating desire for diamonds. This will drive sustainable growth against a backdrop of declining global diamond production and positive underlying demand fundamentals.

Al Cook, Chief Executive Officer of De Beers Group, said: “We are reinventing every part of De Beers to grow value. Through delivery of our Origins strategy, De Beers will be streamlined, focused, and a leader in diamond technology, provenance and luxury retail. We will recreate the magic of natural diamonds for modern consumers.

“The outlook for natural diamonds is compelling. Global supply is declining with no new mines discovered in the past decade. Consumers in key regions are becoming more affluent and are increasingly differentiating between natural diamonds and lab-grown diamonds.

“Every part of De Beers must add value in itself. But it is our integration from the upstream to the downstream, from the south of Africa to the north of Canada, across our portfolio of technologies, that makes De Beers unique. And it is through that integration that we will create value as brilliant as our diamonds.”

Business streamlining

De Beers Group is well on the way to delivering over $100 million in sustainable annual cost savings through a reorganisation and by focusing its capital spend. One-off cost savings will also be delivered through the disposal of non-diamond assets, deferments of non-core projects and the disposal of non-strategic equity holdings.

Focused upstream

De Beers has a highly competitive portfolio of mining assets that are among the best on the cost curve and have substantial production capability and reserves. With global natural diamond production forecast to decline over the coming decade, and as G7 sanctions impact the flow of Russian diamonds into key diamond consuming countries, De Beers’ portfolio is well positioned for the future. 

De Beers will focus its upstream investments on the major projects that will deliver the highest returns, including the ramp-up of Venetia Underground in South Africa and progression of Jwaneng Underground in Botswana, with future optionality to deliver additional projects in Namibia and Canada should industry dynamics warrant. Exploration expenditure will be refocused towards Angola, which represents the most prospective region in the world and where De Beers’ exploration activities are well underway in the north-east of the country.

Integrate midstream

De Beers has a rough diamond sales model that adds value and reduces volatility for both De Beers and its partner countries, underpinned by long-term contracts with its Sightholders.

Technology is poised to revolutionise the midstream, and De Beers will be at the forefront of this trend through its digital portfolio. The results will be greater efficiency, lower working capital and lower rough diamond inventory levels. De Beers’ Tracr technology is not only valuable for registering the information required under new diamond import rules within G7 countries, but also offers an enhanced consumer proposition through connecting diamonds to their source.

Reset downstream

De Beers has a track record for driving growth in demand for natural diamonds and will evolve its approach for a new generation of consumers. This will involve growing desire for natural diamonds through the reinvigoration of category marketing, embracing new approaches that maximise reach and impact. Collaborations with retailers will be key to the new approach, reflecting the pivotal role that they play in the diamond acquisition journey. The successful Seize the Day pilot campaign in Q4 2023 saw more than 22,000 retail stores lend their support, clearly demonstrating the potential of the model. This year, De Beers will progress strategic relationships with leading retailers such as the collaboration recently announced with Signet Jewelers in the U.S. and a collaboration with Chow Tai Fook in China.

De Beers will also evolve its proprietary retail brands, scaling up its global luxury De Beers Jewellers brand whilst refocusing its Forevermark brand on the fast-growing Indian market.

With the price difference between natural and lab-grown diamonds widening fast, De Beers understands how important it is for consumers to be able to differentiate them reliably and quickly. De Beers is therefore pleased to announce today the launch of a new retail-facing diamond verification instrument, bringing the company’s leading lab-grown diamond detection technology to the retail counter for the first time.