The diamond mining companies need to play their part to ensure profitability throughout the distribution chain. Therefore, the trade should be encouraged that a meeting of the top eight miners took place this month to discuss some of the industry’s most pressing challenges.
Rio Tinto hosted the meeting at its London headquarters with representatives from De Beers, ALROSA, Dominion Diamond Corporation, Grib Diamonds, Petra Diamonds, Lucara Diamond Corporation and Gem Diamonds all in attendance.
According to Bloomberg – which broke the news of the meeting – diamond marketing, industry research and the threat to consumer confidence from undisclosed synthetic stones entering the market were the main subjects discussed.
The companies confirmed the meeting in a prepared statement sent to Rapaport News. The statement read, “Preliminary discussions have been held between a number of producers to explore the potential remit and scope of an industry association for diamonds that would seek to better understand, address and protect the needs of diamond consumers. These discussions are at an early stage, they cover many topics and no agreements have been reached. Until these discussions have concluded, no further comment will be made.”
A strong, well-funded association is undoubtedly required to deal with these issues. The industry has long called for a body that will fund a campaign to drive consumer demand through contributions from its most profitable sector – the miners.
The cracks in consumer demand that have surfaced since De Beers shifted its marketing budget to support its own brand-focused campaigns, rather than generic diamond promotion, have become all too apparent. Consumer demand has stagnated and diamonds have lost market share to other luxury products. Furthermore, the increase in undisclosed synthetic diamonds entering the market in the past few years poses a serious threat to consumer confidence and the industry’s ethical standing.
There have been previous attempts to form such an association. Following the 2008-09 crisis, the International Diamond Board, another Rio Tinto initiative, fell apart when ALROSA declined to make a commitment. This new, yet-to-be-named initiative seems to be a more cohesive effort between the miners, even at this very early stage.
The trade leadership is hoping the miners will be equally cooperative with them, although they seemed as surprised as any to learn about the meeting.
The World Diamond Mark Foundation (WDMF), a generic marketing initiative of the World Federation of Diamond Bourses (WFDB), merely cited the Bloomberg article in its response about the meeting. WFDB president Ernie Blom noted that the foundation is in advanced stages toward implementing a comprehensive strategy and program for the generic promotion of diamonds.
“We hope to engage with the producers and get them on board with us, as their participation and stated willingness to fund such efforts will be crucial to the success of generic promotion throughout the supply pipeline,” Blom said.