Latest news with #DeBeers
Yahoo
4 days ago
- Business
- Yahoo
Burgundy Diamond halts operations at Canada mine amid low diamond prices
Australian mining company Burgundy Diamond Mines has suspended operations at its Point Lake diamond mine in Canada, attributing the decision to record-low diamond prices. The Point Lake site, part of the company's Ekati mine in the Northwest Territories (NWT), will see several hundred employees and contractors laid off as a result. Burgundy Diamonds corporate communications manager Ariella Calin said: "Burgundy Diamond Mines made the decision to temporarily suspend open-pit mining at Point Lake, which constitutes a shift from surface mining operations in the short term.' Despite the suspension at Point Lake, mining operations at the Misery underground mine remain unaffected, with production rates showing significant improvement in recent months through improved mining techniques and equipment. Burgundy is expected to provide a quarterly production update towards the end of July. The company said in a statement: 'The company will continue to maintain Point Lake to ensure that it can quickly and efficiently restart operations, should market conditions allow.' The global dip in diamond prices has led to reduced profitability across the sector, prompting companies such as Rio Tinto and Anglo American to consider closures and spin-offs of their diamond businesses. Rio Tinto plans to close its Diavik mine by early 2026, while Anglo American, owner of De Beers, is exploring the option to divest its entire diamond segment. In May, De Beers Group announced plans to discontinue its lab-grown diamond jewellery brand Lightbox and focus on natural diamonds in the jewellery sector. In response to the challenging market conditions, Burgundy has ceased trading on the Australian Stock Exchange pending further operational updates, reported Reuters. The company is prioritising the mining and processing of higher-margin ore at Ekati to reduce costs. As the productive life of Canada's diamond mines draws to a close, the NWT community is advocating for infrastructure improvements and new projects to mitigate future job losses. NWT & Nunavut Chamber of Mines executive director Karen D. Costello said: "The Northern mining industry has been around for over 90 years. "And it has been recognised that we do have incredible mineral potential, but we do need robust exploration to make the discoveries, and we do need the known projects to advance to become the next generation of mines." "Burgundy Diamond halts operations at Canada mine amid low diamond prices" was originally created and published by Mining Technology, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Bloomberg
6 days ago
- Business
- Bloomberg
Anglo's Handling of De Beers Sale Irks Stakeholder Botswana
Anglo American Plc 's handling of the De Beers sale has angered Botswana, which owns 15% of the diamond producer, because the government believes that it hasn't been properly consulted, people with knowledge of the matter said. Anglo is selling De Beers as part of a restructuring plan outlined by Chief Executive Officer Duncan Wanblad after the company fended off a takeover approach from BHP Group Ltd. last year.
Mint
6 days ago
- Business
- Mint
Are diamonds even a luxury anymore? De Beers reckons with price plunge
De Beers chief executive Al Cook wants to save a generation of lovers and newlyweds from what he calls a 'huge con" when it comes to buying diamonds. In the process, he hopes to rescue his iconic brand—and perhaps the diamond industry as it has existed for more than a century—from an ominous decline. London-based De Beers almost single-handedly persuaded generations of consumers that love wasn't genuine unless it was sealed with a diamond. The stones were prized not only for their beauty but also as a miracle of nature formed over a billion years deep in the earth, and then extracted in exotic locales—often on behalf of De Beers. Now diamonds can be made in labs that mimic the earth's extreme pressure and temperatures, but for a fraction of the price. A decade ago, such man-made gems were novel. Today they are mainstream, and increasingly challenging the perception of diamonds as a luxury accessory. Walmart sold its first lab-grown diamonds in 2022, but now the stones make up half of its diamond jewelry assortment. Signet Jewelers, which says it is the world's largest retailer of diamond jewelry, with brands that include Kay Jewelers, Zales and Jared, is partnering with De Beers to extol the virtues of natural diamonds in a new marketing campaign. But last month, Signet said it, too, has been adding more lab-grown diamonds to its fashion jewelry, which was among the factors helping to pull the company out of a prolonged sales slump. Synthetic diamonds currently account for more than a fifth of global diamond jewelry sales, up from less than 1% in 2016, according to Paul Zimnisky, an independent analyst. For engagement rings, the penetration is even higher. More than half the engagement rings purchased last year in the U.S. had a lab-created diamond, a 40% increase compared with 2019, according to a survey of nearly 17,000 U.S. couples by wedding planning website The Knot. 'Diamonds were always seen as expensive, a rich person's asset," says Matt Bick, a third-generation diamond seller with a showroom on the same London block as the De Beers headquarters. 'Now everyone can wear them." And that is Cook's quandary. A geologist and former longtime oil and gas executive, Cook took the helm of the diamond-mining and jewelry giant in early 2023. Since then, the influx of lab-grown diamonds out of China, India and elsewhere has turned into a flood, crushing demand for natural stones. Over the past two years, De Beers's parent, mining giant Anglo American, has slashed the book value of its majority holding in the diamond unit by about 45%, or $4.5 billion. Last year, while fending off a takeover attempt, Anglo said it would spin off De Beers through a sale or listing to focus on businesses like mining copper and iron ore, but for months found a dearth of potential buyers at prices it can stomach. That has led to preparations for Plan B, a public listing. Anglo executives hoped to be well into the process of hiving off De Beers by now, but increasingly it looks like any deal could take until next year, Cook and others say. With Trump's tariffs sparking fears about an all-out trade war, De Beers may need a Plan C. The U.S. is the world's largest diamond-jewelry consumer, with no commercial mines of its own. Threatened tariffs have already made cut and polished natural diamonds more expensive in the U.S., at a time when many consumers are already choosing the more affordable lab-grown variety. De Beers and Anglo have recently signed nondisclosure agreements with around a dozen suitors for the diamond business, people close to the companies say. An IPO is not off the table, and Anglo executives have said privately that the company won't rush a sale if they think waiting will get them a much better deal. Cook says he knew taking the De Beers job would almost certainly mean helping sell the company. He didn't know Anglo would be pressured to move so quickly. In one of his first big moves, Cook shuttered De Beers's production of its own lab-grown diamond jewelry under the brand name Lightbox. Cook's move effectively put De Beers all-in on a bet that it could reverse the multiyear drag on the prices of mined diamonds. Manufactured diamonds are 100% carbon, with the same hardness and sparkle of the original. Nevertheless, De Beers's future depends on consumers who believe that authenticity can't be made in a lab. During an interview at the company's historic headquarters in Central London, Cook said too many mass-produced stones are masquerading as something special to justify steep markups. He argues that shoppers are cheated when similar pieces of lab-grown jewelry are for sale at wildly different prices depending on who's selling them. 'I'm deeply worried there's a huge con going on around lab-grown diamonds," Cook said. 'I can't believe that's sustainable." He added that the democratization of diamonds diminishes what made them special in the first place. 'For as long as humans have been conscious," he said, 'we've prized something precious and rare." To sell a new generation of shoppers on the virtues of natural diamonds, Cook pushed for Anglo to sharply increase De Beers's marketing budget to its highest in a decade. Together with Botswana, the company's biggest diamond supplier and a minority owner, they boosted De Beers's marketing allocation by more than 25% this year. The effort coincides with a push by organizations such as the Natural Diamond Council to promote mined diamonds while maligning the lab-grown variety. The nonprofit trade group called lab-grown diamonds 'The Dupe" on billboards it tested in Manhattan earlier this year. They referred to mined diamonds as 'For Better," and lab-grown as 'For Worse." 'People think natural and lab-grown diamonds are the same," said Kristina Buckley Kayel, the Natural Diamond Council's managing director for North America. 'They are not." De Beers helps fund the Natural Diamond Council and sits on its board, but isn't involved in developing its marketing campaigns, a De Beers spokesman said. The first De Beers ad campaign as part of a partnership with Signet aired in late 2024 and took a higher road. Called 'Worth the Wait," the ads show couples in various stages of courtship, interspersed with images of volcanic eruptions and lava flows. The tagline: 'Just like your journey, a natural diamond is worth the wait." Cook also earlier this year extended a licensing deal with Botswana to ensure De Beers a steady supply past 2050, ending a nearly six-year stalemate with the African nation that produces the majority of its diamonds. Both sides dug in as they sized up what's at stake. Botswana, which depends heavily on diamond exports, has slashed its economic-growth forecasts as it grapples with the protracted industry slump. Together the partners are trying to drum up demand and fighting to shake the taint of practices that marred the industry's reputation—the trafficking in so-called blood diamonds mined in war zones, with profits used to fund insurgencies. 'We are where we are because of the value of diamonds," says Botswana's ambassador to the U.S., Mpho Mophuting. Samantha Boselli's engagement ring features a pear-shaped lab-grown diamond. When he meets with jewelers and young people, Mophuting talks about how the diamond industry has funded schools, infrastructure like fiber-optic cables and his own graduate education. The message doesn't always resonate with price-conscious buyers. Before she got married last year, Samantha Boselli, a 29-year-old publicist from Hooksett, N.H., chose a 3.5-carat, pear-shaped diamond for her engagement ring. It was grown in a lab. 'The size we could get for the price was unbeatable compared to a natural diamond," Boselli says. She doesn't care that the stone likely won't hold its value. 'When I'm 80 and looking to pass it to a daughter or granddaughter, it will still be a sentimental and beautiful diamond," she says. 'It's not like I'm looking to resell it." De Beers gets its name from two Dutch-Afrikaner brothers, Diederik Arnoldus de Beer and Johannes Nicolaas de Beer, who settled in South Africa and discovered diamonds on their farm in the late 1800s. De Beers grew to control some 90% of the world's diamond trade. When diamond demand collapsed during the Great Depression, De Beers hired the advertising agency N.W. Ayer, which convinced Hollywood actresses to wear diamond rings. One of its copywriters in 1947 came up with the now famous tagline 'A Diamond is Forever." Over coming decades, De Beers broadly succeeded in dictating how much should be spent on a diamond engagement ring: 'Isn't two months' salary a small price to pay for something that lasts forever?" asked a 1980s De Beers ad. By then, however, the company's influence was waning as new diamond mines in Russia and elsewhere were discovered. In the early 2000s, the controversy over blood diamonds was cresting at the same time independent producers were undercutting De Beers. Innovation in manufactured diamonds threw up new hurdles. Though General Electric has been producing lab-grown diamonds for industrial use since the 1950s, technology and consumer tastes evolved rapidly in the past decade. Even gem experts need specialized machinery to tell the difference between quality lab-grown and mined diamonds. De Beers is now trying to draw more attention to the hard-to-see differences, by asking jewelers to shell out $9,500 for a new diamond-testing device called DiamondProof. The device is about the size of an air fryer and designed to be displayed on jewelry-store counters. It takes just a few seconds to show color-coded results: If the stone's image glows blue, it's natural—a result De Beers says it can guarantee. If it glows yellow, it's lab-grown or needs further testing. De Beers hopes that if such a simple-looking contraption can so easily tell mined stones from lab-grown, shoppers might be convinced that there really is a meaningful difference between the two. Most luxury jewelers have opted not to sell lab-grown diamonds. 'They are not rare or natural," says Victoria Reynolds, Tiffany & Co.'s chief gemologist. 'There is an overabundance of them." Sellers that appeal to more price-conscious consumers have less leeway. Sales of lab-grown diamonds at Walmart, the country's second-largest fine jewelry seller behind Signet—according to National Jeweler magazine—soared 175% in 2024 compared with the prior year. 'Our customers are looking for that type of value," said Chris Steinmann, Walmart's vice president of merchandising, jewelry and accessories. The Danish retailer Pandora made a decision in 2021 to sell only lab-grown diamonds, partly due to their lower price, but also because it feels they are less harmful to the environment. Pandora CEO Alexander Lacik said they represent a breakthrough technology that can't be stopped through negative advertising. 'This happened with the car and horses and carriages," he said. 'The world is changing." Signet had been more reluctant to jump on the lab-grown bandwagon than other middle-market jewelers, which some analysts say contributed to a prolonged sales decline, plunging stock price and a large shareholder who had pushed for a sale of the company. Signet Chief Executive J.K. Symancyk, who took the helm in November, laid out a new strategy in March that includes pushing more heavily into lab-grown diamonds for fashion jewelry like tennis bracelets, earrings and necklaces, while aiming to protect the allure of natural stones for milestone purchases like engagement rings. Sales of fashion jewelry with lab-grown diamonds increased 60% in the most recent quarter, compared with a year ago, one factor that helped the company's overall sales return to growth for the first time since April 2022. He added that nearly two-thirds of Signet's customers still prefer mined diamonds for special occasions like anniversaries and engagements. 'We see natural diamonds as lasting and enduring," Symancyk says. 'Fashion trends change." Signet's 20,000 sales associates were recently required to complete a digital training course that taught them how to better communicate the unique features of natural diamonds to their customers, including their origin story, scarcity and intrinsic value. Men at work in the grading room at De Beers in South Africa in 1946. 'You can't really create the magic when you're talking about a stone that was created in a lab," said Christine Vassar-Raus, a regional vice president for the Signet-owned Jared chain, who demonstrated the selling techniques in a Connecticut store on a recent afternoon. 'It's just not as romantic." The influx of lab-grown diamonds has pushed prices down for both types of stones. The retail price of a 1-carat lab-grown diamond has plunged 86% since the beginning of 2016, to about $745, Zimnisky estimates. The price of the same size natural diamond is down 40% over that period to $3,925. Back in 2016, there was only about a $1,000 difference between a 1-carat lab-grown and natural diamond. A natural diamond now costs about five times as much as man-made stone. The plunging prices of lab-grown diamonds have led to buyer's remorse for some consumers. After buying a pair of lab-grown diamond earrings, Durée Ross has sworn off the synthetic stones. She likened them to wearing a counterfeit handbag, even though lab-grown diamonds aren't fake. 'I just didn't feel good about wearing them," said the 49-year-old communications professional, who lives in Fort Lauderdale, Fla. 'Natural diamonds have a better chance of holding their value. They are more of an investment piece." Mined diamonds, like this one at a workshop in London's Diamond District, face stiff competition from plentiful lab-grown stones. Cook, the De Beers boss, describes a future in which abundantly available lab-grown diamonds continue to lose value, pushing them closer in the consumer's eye to cheaper knockoffs like cubic zirconia and moissanite, which have different chemical structures and are readily identified as imitations. For those who've paid $2,000 for a 1-carat lab-grown diamond only to see its value collapse, Cook offered condolences: 'I weep for you."
Wall Street Journal
7 days ago
- Business
- Wall Street Journal
Are Diamonds Even a Luxury Anymore? De Beers Reckons With Price Plunge
De Beers chief executive Al Cook wants to save a generation of lovers and newlyweds from what he calls a 'huge con' when it comes to buying diamonds. In the process, he hopes to rescue his iconic brand—and perhaps the diamond industry as it has existed for more than a century—from an ominous decline.
India Gazette
26-06-2025
- Business
- India Gazette
Indian diamond industry faces continued struggles amid demand slump and tariff woes: ICRA
ANI 26 Jun 2025, 19:43 GMT+10 New Delhi [India] June 26 (ANI): India's cut and polished diamond (CPD) industry is set for another challenging fiscal year, with the recent report ICRA projecting a 7-10 per cent decline in exports in FY2026, following a 17% contraction in FY2025, weighed down by weak global demand and increasing competition from lab-grown diamonds (LGDs), the sector's outlook remains report by ICRA indicates CPD exports fell to a 20-year low of USD 13.3 billion in FY2025, impacted by a global macroeconomic slowdown and a growing consumer preference for cheaper, ethically sourced LGDs. These now constitute 8% of polished diamond exports, up from just 1% in the recent imposition of a 27 per cent reciprocal tariff by the US, a key market accounting for over a third of India's CPD exports, adds further pressure. Although currently paused with a 10 per cent interim tariff, exporters remain wary. Many are rerouting shipments through low-tariff hubs like Dubai and Belgium to mitigatethe report also highlights that operating profit margins for CPD firms fell by 400 basis points in FY2025 to approx. 4 per cent, with ICRA predicting a further dip to 3.6-3.7 per cent in FY2026. The working capital cycle also remains stretched, burdened by high inventory amid declining sales and cautious rough diamond prices for both rough and polished diamonds have dropped sharply, by 8 per cent and 7 per cent respectively in FY2025, while production cuts from miners like De Beers are expected to keep rough prices minor optimism for a recovery in bridal jewellery demand in the US in H2 FY2026, sustained weakness in Chinese demand and intensifying LGD competition continue to cloud the outlook. The CPD industry may need to adapt more aggressively to shifting consumer trends and tariff realignments to regain the bottom line, ICRA says the credit profile of Indian CPD entities is expected to remain weak in FY2026, characterised by modest earnings and a continued stretched working cycle. (ANI)
