De Beers says industry is on the path to recovery

Antwerp World Diamond Centre (AWDC) organised a Diamond Town Hall Meeting, on June 3, 2009, in which, DTC Managing Director Varda Shine, De Beers External Affairs and Marketing Director Stephen Lussier, De Beers Managing Director Gareth Penny and the De Beers team announced that the diamond sector has bottomed out, and the industry is now set for renewed. The meeting hosted industry leaders and some 500 diamond merchants and manufacturers.

“The Diamond Town Hall Meeting was a first for the Antwerp World Diamond Centre (AWDC),” commented Freddy Hanard, CEO of AWDC. “The innovative concept was inspired by traditional town hall meetings where community leaders debate with their constituencies. At this meeting, the Antwerp stakeholders were able to understand how De Beers envisions the industry managing through and emerging from the economic crisis and the opportunities that will result in the future”, added Hanard.

De Beers Managing Director Gareth Penny made a presentation on the state of the industry, stressing that “diamond inventories have fallen to levels which have justified increasing the mining production of the De Beers mines after it had been reduced by some 90 percent in the first quarter of the year.” Commenting on the industry’s growth factor, he said, “The demand for De Beers rough diamonds is picking up”, apparently, applications for the next DTC sight were well above $700 million. Furthermore, in a clear reference to Botswana, “the De Beers production is increasing to keep pace with demand. Retail sales have also shown an improvement”, he added.

Gareth Penny explained pricing of roughs through the historical DTC rough price trend chart, that after each of the last four major recessions in the United States in the 1970-2009 period, rough prices have risen steeply in five years following the recession. Although not commenting if De Beers would raise prices at its upcoming sight, Penny mentioned that "We expect rough prices to be more in line with polished. We are looking at it, and continue to monitor the situation.” Essentially this is an issue of stocks and liquidity, he added. Polished diamonds have maintained their prices in the past five weeks.

The De Beers spokesman mentioned that retailers should have worked through their excess stocks and the 2009 Christmas season will be better than last year. “I think that it’s a pretty reasonable assumption from where we are sitting now,” said Penny, taking comfort from the rising US stock markets and the improved confidence indices.

“After the overwhelming success of this first Town Hall Meeting,” said AWDC Deputy CEO Ari Epstein. “We will plan more similar events like this in the future. In times of crisis, the best service the AWDC can provide is accurate and authoritative information to its members.”