Where is De Beers heading now ?

Marianne Riou

On Monday 27 June, at De Beers’ 2016 Business Excellence Seminar, speeches were made by the outgoing and incoming directors—Philippe Mellier was due to step down four days later. What they said gives us some indications of what to expect in the future and the new course set for De Beers.

Thinking about the future to avoid becoming obsolete

Philippe Mellier, the outgoing CEO of De Beers, began proceedings by announcing the theme and the challenge for the 2016 seminar, under the title Innovation and Transformation: sustaining success in tomorrow’s world.

De Beers is engaging in global brainstorming, both for the company itself and the future of the diamond industry that must in no event “become obsolete in a global market“. The industry is going through a period of self examination and it is clear that De Beers has also done a great deal of work in recent years, under the stewardship of Philippe Mellier. The tough character of the outgoing CEO has put De Beers on a new heading. To be frank, he did a tough job—which had to be done! —that seriously complicated his relationship with sightholders, who were not always the biggest fans of his biting speeches! But, as Philippe Mellier said at the end of his speech, “we must all think about what we need to do now…

Speaking once again for his final (and moving) speech at the gala dinner, he ended by recalling the pleasure that he found working in this field, about which he knew nothing when he arrived, and meeting members of these family companies that have been a part of the diamond business for so long. We could feel his sadness at leaving…


The need to change… and to support the choices made by De Beers!

Mark Cutifani, the CEO of Anglo American, also spoke at the opening of the seminar. He naturally thanked Philippe Mellier for his 5 years of good service and the organization applied on a strategic level—an organization that is here to stay. Mark Cutifani also welcomed the arrival of Bruce Cleaver at the head of the diamonds division of his Group. He qualified him as “someone with a perfect understanding of the industry and the sightholders… ” A word to the wise…

Mark Cutifani then stressed the “hard times” that we have been through and the need to “adapt to a changing environment, to evolve and develop“. What will Anglo American do according to its CEO? It will work on “social development and transparency” and “taking care of [its] companies“, confirming “De Beers’ actions and its leading position considering that this company “is not comparable with those in other industries or markets with different dynamics”, but could “bring stability and encouragement“. Mark Cutifani also insisted on the fact that Anglo American has an “open mind” and intends to stay that way, by accelerating its actions and its development.

He underlined that fact that, in his opinion, nobody has De Beers’ qualities in the specific context of mining and that [Anglo American must] support it, everybody needs to do all they can to promote their products.” For Mark Cutifani, De Beers’ management continues to believe that a healthy pipeline is a benefit for the whole market. The gem producer therefore remains an example both for Anglo American and the mining industry in the broadest sense, at the cutting edge of change.

Mark Cutifani’s conclusion introduced the speech to be made by Bruce Cleaver and future strategies: taking on-board complimentary experiences, making a commitment to customers, to partners, to stakeholders, to shareholders, to local communities”.

Strengthening the bond with sightholders

Strengthening or re-building? In any case, that is what Bruce Cleaver chose to emphasize in his closing keynote for the 2016 seminar!

He recalled his connection with the diamond industry and his place in this family, proclaiming that is was “great to see familiar faces again“.

For him, Philippe Mellier, with whom he has “worked closely” has laid down solid guidelines and foundations. But, as CEO of De Beers, the time has come now for him to “reconnect with all of our key sightholders“. Naturally, he recalled his long experience with De Beers, in spite of his six month absence.

For Bruce Cleaver, these last few months have confirmed that the desire for diamonds remains high. He stressed the importance of customer demand, which ensures the health of our industry. Although he did not deny the difficulties the industry has experienced recently, he asked his customers to “accept that volatility is the new norm“.

He also recalled the beneficial effect of diamonds in many places around the world and concluded on a positive note. The new course for De Beers is clear “the partnership with [sightholders], is at the heart of its strategy.” Flexibility and responsiveness of the sightholders’ needs will be the new given! Success must be present at every part of the value chain, and De Beers need of course to be open and willing for change, poised to react quickly to events, whether they are foreseen or not.

Bruce Cleaver drove the message home at the end: “It works! Your business is MY business, your interest is MY interest.”