Anglo American Corporation provided an opportunity to get more acquainted with the diamond business of De Beers during the analytical and investment seminar held in London last Monday. The presentation was conducted by a joint management team led by Mark Cutifani, executive director of Anglo American and chairman of De Beers, who drew a broad picture of De Beers' activities and the diamond business as a whole, thereby contributing to greater transparency in this area.
Mark Cuthifani, CEO of Anglo American, said: "De Beers is an inspiring business, not only because of its unique position in the market and in the industry, but also because of the special nature of its products. Anglo American aims to be a diversified mining company, and De Beers plays an important role in our diversification, mitigating the risks associated with the long production cycles of other companies, as it is a world-class business with very attractive supply and demand dynamics. " Cutifani also emphasized that at present De Beers has made significant progress in terms of production and sales.
Philippe Mellier, CEO of De Beers, added: "The diamond industry receives almost all of its revenue from consumer demand for diamond jewelry, and this demand continues to grow worldwide. Combined with economically competitive assets, the long life of mines and the strength of our partnerships with host governments, this creates an attractive offer and provides us with a good position for growth. "
Mellier said that, in his opinion, the diamond industry is based on attractive fundamental factors of supply and demand, as evidenced by the recently demonstrated strong production performance of De Beers, which provided cash flows of US $ 1 billion over the past 18 months.
According to Bruce Cleaver, De Beers' executive director for strategy, "unlike the demand for precious metals, the only important driver of the value of diamonds is the final consumer demand for jewelry." He noted that the total consumer demand for polished diamonds in 2013 reached $ 25 billion, of which 40% to the United States, 16% to China and 8% to India.
According to the presentation, in 2013 the share of De Beers in value in the global diamond production was 33%, while the share of ALROSA reached 26% of the total world production, estimated at about $ 18 billion. Cleaver believes that the supply of rough diamonds will begin to decline by 2020, and the demand for diamonds will continue to grow.