Posted: ’21-SEP-05 15:00′ GMT – Mineweb.net – Archive
Retaining the untarnished image of diamonds remains a tough job for the world’s largest producer, according to the head of De Beers’s South African operations, Jonathan Oppenheimer.
Speaking at the first SAMDA Global Mining Conference in Cape Town, Oppenheimer described some perceptions of and competition to natural diamonds that the company deals with when trying to sustain and grow global demand for diamonds.
“We face huge strains, we face enormous challenges,” said Oppenheimer, “But we as an industry are ready to face up to those challenges, and we as De Beers are ready to stand at the forefront of the industry, standing up to those challenges.”
Oppenheimer says that his company has been tracking consumer sentiment since it began advertising before World War II. Since then consumers have changed from trusting that diamonds were extracted ethically, to today where proof is demanded.
“You only have certainty in the diamond market if Joe Citizen remains confident in the diamond he beholds,” said Oppenheimer, “We are in this business for the long term so we must maintain the consumers confidence in diamonds.
De Beers played a pivotal role in the introduction of the Kimberley accord, a certification process, massively reducing the possibility of conflict diamonds hitting the market.
Before the accord, conflict diamonds, at their worst, made up about 4% of the global rough diamond market, says Oppenheimer, now, they make up less than 1%, according to the United Nations.
SAMDA, the conference’s organiser and host, has according to South Africa’s department of minerals and energy, approached the South African government about introducing a similar accord in the rest of the country’s mineral industry.
Oppenheimer says there is a movie starring Leonardo Di Caprio with the title Blood Diamond, which to be released in late 2006.
According to the Internet Movie Data Base (IMDB.com), the storyline of the film is: “A farmer, a smuggler, and a syndicate of businessmen match wits over the possession of a priceless diamond.”
Oppenheimer says the movie could damage the lucrative Christmas sales if not handled properly. “Can you imagine its impact on the Christmas-buying audience in America if the message is not carried through that this is something of the past,” says Oppenheimer, “That this is something that has been managed and taken care of.”
Tuesday’s presentation showed that there is a about $1 trillion of diamond jewellery in consumers possession in the world, and that only $5 billion of this is offloaded into the market each year.
Of the $60 billion annual consumer diamond industry, $10 billion of that is rough diamonds.
Synthetic and Natural living side by side
“Ladies and gentleman, synthetics is a terrifying prospect to the diamond industry,” Oppenheimer proclaimed, “Because against the thought of conflict diamonds you can talk about the diamonds they make not hurting anyone.”
He insists that while synthetic diamonds bear similar quantities to real diamonds, the natural process that takes millions of years cannot be replicated in a laboratory over a couple of days. Perhaps not, but companies in the synthetic business reckon that their product is equal to or even better than the stones won from the earth. And De Beers itself produced synthetic gem-sized stones decades ago. Problem was thet they were coloured and, generally, less valuable than the clear, colourless stones that are demanded by the jewellery industry.
“Many people talk about synthetics, and it is of concern’ to us,” says Oppenheimer. “But at the same time we feel very confident as a company that synthetic diamonds are 100% detectable. They are a potential threat, but it is entirely manageable.”
Talking of gems Oppenheimer added: “I do not believe that synthetic will actually materialise in the short term, it is a medium- to long-term thing.”
De Beers is attempting to push synthetic diamonds up the value chain to compete in other industries like electronics and not in jewellery.
“What I am hoping, and we are very much involved in the synthetic diamond business, is that the synthetics value proposition will move synthetic diamonds to higher-value products than jewellery.”
Oppenheimer says that a huge amount of money being spent on research in diamonds uses in the electronic industry, while “not a lot of money is going into a possible jewellery substitute.”
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