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De Beers says it will avoid Zimbabwe diamonds

By Loni Prinsloo ] Business Times

De Beers high-quality diamond retail arm Forevermark will not sell any diamonds from Zimbabwe’s controversial Marange fields, CEO Stephen Lussier said at the launch of the exclusive brand in SA.

Forevermark CEO Lussier with a model holding a 40 carat
Forevermark CEO Lussier with a model holding a 40 carat

This comes after the diamond regulator, Kimberley Process, last week gave Zimbabwe the green light to resume diamond exports from its Marange fields.

International sales from Marange were banned in 2009 because of military interference in the country’s mines, which included abuses such as murder and rape. Lussier said the Marange diamonds were generally too small and low in quality for the brand to sell.

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In addition, Forevermark’s selection process went well beyond adherence to the minimal standards of the Kimberley Process, said Lussier. “The Forevermark carries a guarantee that the diamonds used for our products have contributed positively to communities, the environment and supply chains along the way.

“In a diversifying and maturing industry, consumers seek more from their luxury purchases. Not only do they demand value for money, but there is increasing interest in the source of their purchase and the journey it has travelled.

“Forevermark offers customers a promise of responsible sourcing, paired with rarity and beauty. Less than 1% of the world’s diamonds are eligible to be branded Forevermark,” he said.

Currently, Forevermark obtains about 95% of its diamond supplies from the De Beers mines in SA, Botswana, Namibia and Canada. Mining major Anglo American last week announced that it would take over all of the De Beers operations, including its retail arm, after buying out the Oppenheimer family’s 40% stake in De Beers for $5.1-billion.

Lussier said while this symbolised the “end of an era” in the diamond industry, business, especially on the retail side, is set to continue as usual. He said Anglo CEO Cynthia Carroll had made it clear that Anglo understood that the marketing of diamonds is different to that of any other commodity.

“De Beers has the best diamond distribution system in the world and Cynthia Carroll has indicated that Anglo will support and continue along existing marketing structures,” said Lussier.

A key marketing drive for De Beers in recent years has been to enter and penetrate emerging markets. “China has been a success story for De Beers. Fifteen years ago there wasn’t a single store selling diamonds in the whole country, and most consumers hadn’t really seen diamonds before.”

Currently, China represents about 12% of world diamond demand and is expected to become the world’s second-largest diamond market, overtaking Japan, as early as next year. By 2015, China and India are expected to take up about a third of the world’s diamond demand.

“The Chinese are very focused on luxury goods. An upper-middle-class Chinese consumer will spend about six times as much as his or her Western counterpart on acquiring luxury goods, which makes this a very exciting market for De Beers and Forevermark,” said Lussier.

The Forevermark brand has been rapidly expanding its geographical footprint in recent years, entering big markets such as the US, China, Japan and India. Lussier said the company would continue with an aggressive building and expansion programme. It planned to grow by at least 50% a year for the next four years.

As part of the brand’s expansion drive, Forevermark has partnered with local diamond distributor and jewellery manufacturer Carato to launch the brand in SA.

“This partnership will give us a good mix of local experience and knowledge, matched with the brand’s global expertise.” Forevermark is sold in Jewel Africa shops. Business Live.co.za