Late last month, leaders of the gem and jewelry industry in India called on their members to pause rough diamond imports for 30 days, starting today, as the world continues to grapple with COVID-19.
Chaim Even-Zohar echoed those calls in a column published on IDEX April 22 in which the longtime industry analyst and journalist made the case for an even longer ban on rough imports in the world’s No. 1 cutting and polishing center.
De Beers responded with an open letter from CEO Bruce Cleaver on May 1 that made clear the company’s position on a rough-diamond-buying ban while not expressly mentioning the Indian trade groups’ appeal.
“We mine a valuable, finite and depleting resource,” Cleaver wrote in his letter. “We will only sell it when the demand is such that it can create sustainable value for all of us. However, just as we are not compelling our clients to purchase, we strongly believe it is counterproductive for any part of the industry to compel them not to purchase.”
Last week, the De Beers boss sat down for a remote interview with National Jeweler to elaborate on the company’s position.
He also talked about what consumers will expect from brands after COVID-19, marketing diamonds in a post-pandemic world, and why he thinks the U.S. will remain the No. 1 market for the stones despite the severity of the crisis here.
This interview has been edited for length and clarity.
National Jeweler: First, I want to start with the main issue you addressed in your letter, of keeping the rough supply flowing as the crisis subsides.
I would assume your letter was in part a response to Chaim Even-Zohar’s recent column in IDEX calling for India to institute a three-month moratorium on rough diamond imports. In his article, Chaim makes some good points: India has plenty of rough inventory for the foreseeable future—particularly given how murky that future is—and that selling from inventory can help reduce debt and, perhaps, shore up banks’ confidence in the industry.
But in your letter, you make the point that De Beers also has a responsibility to the countries where it mines and the people who live there to keep mining and selling rough to maintain their livelihoods.
Can you elaborate on De Beers’ position on the suggestion of a rough diamond ban in India?
Bruce Cleaver: Sure. Let me say in the beginning that I recognize, and we recognize, this is not an easy situation for anybody. It’s tough at the moment in India, but it’s tough at the moment everywhere and we are of course in completely unprecedented times.
Our position is that global supply chains, especially at times like this, are very important. And any artificial changing of a global supply chain can probably have consequences that are even worse for us and may have much longer-term consequences than the problem that the GJPEC and/or Chaim are talking about [and] trying to solve.
After all, the diamond industry consists of a whole series of interconnected players in the value chain.
I feel strongly that if you cut off one part of that supply chain … you’re doing yourselves and the industry a disservice, but you may also be creating unintended consequences.
NJ: What sort of unintended consequences?
BC: Well, our response to the crisis has been firstly around the health and safety of everybody who works for us and all the communities around us. So we’ve spent a lot of time and effort and money, as you would expect, around our mining communities in southern African in particular, and in Canada, trying to find a way within reason—and that’s an important point, this “within reason” point—to keep those mines open, albeit at a lower production rate because those mines in themselves are complicated ecosystems.
