As the top player in the natural diamond industry, De Beers holds a third of the market share, ahead of Russia's Alrosa. It is both a miner and a retailer, selling diamonds through third-party retailers and its own outlets. However, De Beers has faced a "winter" in the past two years, with the market becoming very sluggish. One is the sharp decline in the sales of natural diamonds in the wedding market, which is actually the impact of lab-grown diamonds, with a huge price impact and gradually occupying the market of natural diamonds.
More and more jewelry brands are also increasing their investment in the lab-grown diamond jewelry field, wanting to share a piece of the pie, even De Beers also had the idea of starting Lightbox consumer brand to produce lab-grown diamonds. However, recently, De Beers announced a major strategic adjustment, deciding to stop producing lab-grown diamonds for its Lightbox consumer brand and focus on the production and sales of natural polished diamonds. This decision marks De Beers' shift of focus from lab-grown diamonds to natural diamonds.
In the JCK Las Vegas breakfast meeting, De Beers CEO Al Cook said, "We firmly believe that the value of lab-grown diamonds lies in its technical aspect, rather than the jewelry industry." De Beers is shifting its focus for lab-grown diamonds to the industrial sector, with its Element Six business undergoing a structural optimization that will integrate its three chemical vapor deposition (CVD) factories into a $94 million facility in Portland, Oregon. This transformation will transform the facility into a technology center focused on producing diamonds for industrial applications. Cook further stated that De Beers' goal is to make Element Six "the leader in synthetic diamond technology solutions." He emphasized, "We will concentrate all our resources to create a world-class CVD center." This announcement marks the end of De Beers' six-year journey of producing lab-grown diamonds for its Lightbox jewelry line. Prior to this, Element Six had focused on synthesizing diamonds for industrial and research applications.
Lab-grown diamonds, as a product of human wisdom and advanced technology, are crystals that are cultivated by precisely controlling various conditions in a laboratory to simulate the formation process of natural diamonds. The appearance, chemical properties, and physical properties of lab-grown diamonds are almost identical to those of natural diamonds, and in some cases, lab-grown diamonds even surpass natural diamonds. For example, in a laboratory, the size and color of the diamond can be adjusted by changing the cultivation conditions. Such customizability makes it easier for lab-grown diamonds to meet individualized needs. De Beers' core business has always been the natural diamond mining industry, which is the foundation of everything.
Last year, the global diamond industry was in a slump, and De Beers' profitability was in jeopardy. However, even in such a situation, Al Cook (CEO of De Beers) has never expressed a negative attitude towards the rough market's future and has continued to interact with Africa and invest in the renovation of multiple diamond mines.
De Beers also made new adjustments.
The company will suspend all operations in Canada (except for the Gahcho Kue mine) and prioritize investment in high-return projects, such as the capacity upgrade of the Venetia underground mine in South Africa and the progress of the Jwaneng underground mine in Botswana. Exploration work will focus on Angola.
The company will dispose of non-diamond assets and non-strategic equity, and defer non-core projects to achieve the goal of saving $100 million in annual costs.
De Beers will negotiate a new supply contract with sightholders in 2025.
Beginning in the second half of 2024, the miner will stop reporting sales results by batch and switch to more detailed quarterly reports. Cook explained that this was to meet the call for "improved transparency and reduced reporting frequency" by industry members and investors.
Forevermark will refocus on the Indian market. De Beers will also expand its operations and "develop" its high-end consumer brand De Beers Jewellers. Sandrine Conze, CEO of the De Beers brand, said at the JCK event: "This brand is currently somewhat cool - you could say it's a bit too engineered. Therefore, we need to make it more emotional and truly release the unique charm of the De Beers Jewellers brand." The company plans to open a flagship store on the famous Rue de la Paix in Paris.
Post time: Jul-23-2024