De Beers, the world’s biggest diamond producer, says that its chief executive has resigned, in a surprise announcement after reporting a surge in first-half net profits on the back of a rebound in demand.
“Gareth Penny has advised the board that he believes it is an appropriate time for him to step down,” a statement said, giving no reason for the move.
He will leave in the “coming months” and until a successor is appointed, Chief Financial Officer Stuart Brown and Chief Commercial Officer Bruce Cleaver will act as joint CEOs, the firm said.
De Beers, 45% owned by mining group Anglo American, said net earnings rose to $255 million including one-off items from $3 million last year. Anglo said it would report an underlying profit of $148 million from De Beers.
Rough diamond sales surged 84% to $2,6 billion and production more than doubled to 15,4 million carats from 6,6 million. De Beers, which controls around 40% of the rough diamond market, was hit particularly hard during the global downturn as consumers shied away from luxury goods, forcing it to temporarily close mines in the early part of last year.
“While encouraged by the strengthening demand in H1, the global economic climate remains fragile especially in the important diamond markets of the US, Japan and Europe so we look to the remainder of 2010 with caution and measured optimism,” the statement said. [Reuters]