De Beers’ artificial diamond turnaround

DE BEERS is launching a company to sell laboratory-produced diamonds for jewellery in a departure from its century-old business model of promoting natural stones.

Real diamonds remain the priority, but De Beers is responding to demand for more affordable jewellery using stones made in days or weeks and sold for hundreds rather than thousands of dollars.

“They’re not to celebrate life’s greatest moments, but they’re for fun and fashion,” said De Beers chief executive Bruce Cleaver.

“We remain a natural diamonds business,” he said, adding that manmade diamonds used in fashion would not undermine the business for real diamonds as they served different markets.

As the world’s biggest seller of natural diamonds by value, De

Beers is a leader in technology and security processes to guarantee the authenticity of natural stones.

To ensure there is no confusion between man-made gems that have little resale value and the real thing, the manufactured diamonds used in jewellery will include a tiny mark showing they are made by Element Six, a unit of De Beers that until now has focused on making stones for industrial uses. The manufactured diamonds will be sold by a new firm called Lightbox Jewelry from September in the US, the leading diamond jewellery market where demand hit a record high last year.

De Beers’ parent, Anglo American, is leading the commodity sector this year with a 13% rise in its share price. The diamond business accounted for 16% of the Anglo American group’s full-year earnings.

If the move by De Beers into fashion jewellery gains traction, Element Six’s capacity will need to expand. De Beers plans to invest

$94 million (R1.1 billion) over four years to build an Element Six factory near Portland, Oregon, which should produce more than half a million rough carats a year from about 2020.

That remains modest in comparison to De Beers’ investment in maintaining production of natural diamonds of $3bn over five to seven years. – Reuters