DE BEERS has a proud history in South Africa. Ever since we discovered diamonds in Kimberley more than 125 years ago, production has secured employment for thousands, provided vital revenues to the economy and ensured that it has remained at the heart of a global diamond jewellery industry worth almost $80 billion (R932bn).
We’re proud to have been part of the country’s past – and, through our largest ever investment, we are ensuring that we’ll be part of its future too.
Last week, we announced our operating profits had increased 36 percent to $1.4bn. Profit on this scale sounds large, but it serves a very important purpose. With the growth in diamond production set to tail off towards the end of the decade, we’re investing $3bn in three new projects to sustain supply in to the middle of this century.
Together these are the biggest diamond production projects in the world – and the largest of them is happening right here in South Africa.
Venetia is already South Africa’s largest diamond mine, producing 3.2 million carats per year. Our $2bn investment will take the mine underground, extending production beyond 2040 and delivering an estimated 94 million carats over its life – that’s around three times De Beers’s total global annual production.
Diamonds produced from Venetia will end up symbolising enduring love for millions of people across the world. But perhaps their greatest impact will be felt where they originated in South Africa, delivering benefits to local communities, sustaining long-term revenues for the economy and supporting the development of the country’s business sector.
More than 3 000 people, drawn primarily from the Limpopo province, will be employed on the project. And the bulk of the equipment and services for the project will be sourced locally in South Africa. Together, this creates a ripple effect through the economy.
The companies throughout our supply chain will, in turn, procure equipment and services from their own supply chains, thereby securing jobs for many more people. These jobs put money in people’s pockets, which is spent locally, growing important sectors such as retail and hospitality. All in all, the investment we make acts as a catalyst – multiplying at every stage throughout the supply chain. The value of the end result is much greater than our original investment.
The financial benefits to the economy are clear, but the impact of our investment runs much deeper. The 3 000 people we employ on the project will be given training while working on the project, ensuring the skills they gain will stand them in good stead throughout their careers, helping to secure the futures for many families.
Of course, existing diamond production won’t last forever, so we’re investing about $50 million in a global exploration programme to find the next viable mine. Here again, South Africa is at the centre – and we’re making progress with 13 new licenses granted.
The scarcity of diamonds is part of what makes them so valuable, so protecting this value is important to both De Beers and South Africa.
That is why we’re also investing millions of dollars in technologies to detect synthetic diamonds and ensure they aren’t passed off as natural stones. Our technologies are now in cutting and polishing factories across the world. They provide reassurance to consumers that they are getting exactly what they’re paying for. They also provide reassurance to South Africa that we care about its natural resource just as much as it does.
De Beers’s business approach seeks alignment between the commercial objectives and economic and social objectives in the countries in which we operate. This means that our success is also South Africa’s success.
So, while De Beers will forever hold an important place in South Africa’s history, our strong financial performance is enabling us to invest in its future too.
Philippe Mellier is the chief executive of The De Beers Group.