All mines in world can come together on one blockchain, says De Beers CEO

We see some sightholders moving while new ones come in as a healthy sign, says Bruce Cleaver

Despite various challenges, the past year was a good one, says BRUCE CLEAVER, chief executive officer of the De Beers Group, the global corporation that has been the leading one in all aspects of the diamond trade for over a century. Edited excerpts of a talk with Rajesh Bhayani on what's ahead for the trade.

What is the impact of the recent fraud in India's gem and jewellery sector, followed by tightening of bank credit, on diamond demand?

There was some immediate impact on sentiment but our discussions with banks suggest good businesses are attracting finance. Our good customers have remained optimistic. Interestingly, this will also be a good year; consumer sentiment has been good, they tell us this. The overall market has seen improvement after demonetisation and implementation of the Goods and Services Tax (GST). Good customers have remained optimistic even after the recent fraud.

In the past one year, De Beers has lost a few of its sightholders (authorised bulk purchasers of rough diamonds) in India, the latest being Gitanjali Gems after the fraud. Are you re-allocating sights (term contracts) to other Indian players?

We see some sightholders moving while new ones come in as a healthy sign. Recently, two new ones were added. Last year, we had 30 sightholders in India; the number remains the same this year. This is a constant process. We are open to having new ones.

De Beers raised prices twice in the past few months. How will that impact demand in the coming quarters, when Indian diamantaires are stressed?

I can’t talk about prices but can say that overall prices are firming up. That is because consumer demand, globally, has been very good. The USA and China also saw good demand at Christmas and the Chinese new year; so is India doing well. 2017 was a good year for diamonds, from the perspective of rough diamonds to polished diamonds reaching consumers. We are hopeful that 2018 will be another good year, perhaps slightly better than 2017.
 

How has been the retail demand for diamonds? There have been rumours of synthetic diamonds being mixed with natural ones.

Retail diamond sale for our 'Forever' mark brand has been very good. Even today, being Akshaya Tritiya day, consumers have planned in advance for buying these. From our side, we are taking all care for testing of diamonds; even retailers use our equipment to test when they sell. That is the change in the trend.

De Beers is implementing blockchain to ensure diamonds are natural, not mixed with synthetics, and that they come from conflict-free areas. What is the progress and how will that help Indian consumers and processors?

A year ago, we started a pilot (experimental venture) for blockchain. There was a need felt for a public register to ensure diamonds are (from) conflict-free (areas) and without mixing. Blockchain is a great idea and we are working with all stakeholders on an asset-tracking blockchain. The ultimate aim is of registering all diamonds, from mining of roughs to selling polished diamonds to consumers.

The project has seen good results. We are working with five big sightholders and a few are from India. We have also spoken to the Gems and Jewellery Export Promotion Council and other stakeholders in India, including retailers; also with trade associations, diamond mining companies and other players elsewhere. All are very enthusiastic about it. We believe all mines can come together on one blockchain. We plan to launch this project with bigger diamonds; for example, 2-carat and higher.