The world’s largest diamond mining company, also Botswana’s main partner, De Beers, has invested US$10.5 billion towards expansion, maintenance and sorting diamonds ahead of negotiations for the Diamond Sales and Lease Agreement with Botswana.
De Beers has also committed to spend US$ 170m this year alone on marketing natural diamonds to consumers around the world.
The revelation comes as some form of relief as many pundits were worried by the De Beers’ announcement to launch a new company called Lightbox jewellery that’d be marketing laboratory grown diamonds. De Beers had also said it had invested
US$94million over four years in the company. However, De Beers Group Executive Vice President Corporate Affairs, David Prager has allayed these fears and assured Batswana and the neighbouring diamonds producing countries of Namibia and South Africa- whose diamonds too are for development - to be “encouraged and not worried” as nothing will replace natural diamonds.
He was fielding questions from Botswana Guardian.
Prager, flanked by Group Executive Vice President commercial and partnerships, Alessandra Berridge, said De Beers is committed to the long term diamond industry. “First, we have not launched Lightbox inspite of our optimism about the future of diamond industry. Consumers around the world spent a record of US$82 billion on diamond jewellery last year, of which USD 43bn was just in the United States alone, that is more than global and the American consumers have ever spent on diamond jewellery.
“We think the future of the diamond is really exciting, we are investing more than US$10 bn over the next five (5) years in maintaining mines, bringing new mines into production, expanding new mines, sorting diamonds, buying diamond technology to detect synthetic diamonds and marketing diamonds.
“We are going to spend US$ 170m this year alone on marketing natural diamonds to consumers that is more than what we spent in a decade and next year we will even spend more than that. So compare that to the investment we are making in Lab grown diamond, we are opening a production in lab grown Oregon in USA and over the next four (4) years, we will invest USD94m.
“There is really no comparison on the scale in terms of where our investment is and where our money is, but what we also know is for our USD10.5bn to be secure, it’s for the diamonds to have a market, not where consumers are confused on what is synthetic and what is natural, that is bad for De Beers and Botswana”.
He said they hope that with Lightbox, it will provide consumers with clarity around what a lab grown diamonds are, and what occasion they should be used for. “There are two different things. It is public knowledge that expansion in Jwaneng is reaching the end of its viability. The timing of the Lightbox is not related to that, it is related to the research that has been done over the last 18 months and the issue that we seek to address in that is reaching a point where we believe we need to do something about it.
“Yes, we are obviously looking at the expansion of Jwaneng and Orapa in time, these are very much on the cards and a discussion between us is open”.
Prager said that Light box have had many engagements with the former president, Ian Khama. “We have also spoken and visited President Mokgweetsi Masisi and we have briefed his cabinet on two occasions. I think De beers and government are aligned in terms of strategy and in terms of our understanding that our partnership in Botswana is entering into a new face and we will be having that discussion in due course”.
“I was part of the team that briefed President Masisi back in November whilst still a VP in the UK and we briefed him on the Lightbox strategy and what we saw going on in the market. I have to tell you, not only was he supportive and encouraging, he was incredibly insightful and some of the insights he gave us at the time really helped to form and shape the Lightbox strategy going forward”.
Berridge added that , “Yes, we had a team member from government embedded in the Lightbox team for the last 18 months or so, and we have kept government updated on the research that we have done and the strategy as we came with the announcement on 29th May.”
No stone left unturned
De Beers took both Namibian President Hage Geingob and South African President Cyril Ramaposa and their teams through its strategy ahead of the announcement. “I think that across all three producer countries there is an understanding of the strategy and of the fact that ultimately from a natural diamond perspective,” said Prager.
But is the decision to go the lab grown diamonds way a strategy to wipe out competitors and control the market? Prager said; “We are following what our consumer research tells us, consumers tell us two things, that lab grown diamonds are different than natural diamonds, natural diamonds are for less most important things. Our view is, we have created this product, it has completely different story from natural diamonds and we put it in the market and it will compete and competition will hopefully give consumers what they want and others synthetic diamonds producers who want to compete with the product.”
Prager vehemently denied that De Beers has ever condemned synthetic diamonds. “Let us be clear, De Beers did not condemn synthetic diamonds, who are we to do so? We never had problems with synthetic diamonds; we had a problem with synthetic diamonds that were marketed in a misleading way. We have invested tens of millions over decades to create screening technology that allows us to screen diamonds to determine which ones are real.
“Our view is that Lightbox is far from the natural diamonds, nobody has beaten us nor are we joining them. We think natural diamonds are the tremendous future. We are a natural diamond company and we are bullish on the future of the natural diamonds; USD 82 billion was spent on the diamond jewellery around the world last year that is a record”.