Mellier was addressing the second day of the World Federation of Diamond Bourses (WFDB) and International Diamond Manufacturers Association (IDMA) Presidents meeting in Tel Aviv recently.
“Diamantaires need to make sustainable returns so they can invest in things such as new technology, marketing activities and business efficiency. Meanwhile, at De Beers we need to make sustainable returns so we can invest in things such as production capacity, with our current projects requiring expenditure of more than $3 billion,” he said.
Turning to the midstream, Mellier said that while there “is no ‘silver bullet’ that will provide sustainable returns for all” there are “activities and investments that can enhance midstream prospects”.
“First, there is a need to generate consumer demand growth downstream – this supports the value of diamantaires’ polished diamond sales. Second, there is a need to facilitate efficiency and maintain third party confidence in the midstream – this will reduce diamantaires’ operating costs. And third, there is a need to maintain availability upstream – this will limit the escalation in diamantaires’ input costs.”
Mr Mellier highlighted De Beers’ multibillion dollar of investment in three of the world’s most important diamond projects, saying that “this type of investment is not undertaken lightly as we know that it will be many years before we stand to make a single dollar of return on the billions we commit”.
“But our optimism in the industry’s long-term future is shared almost universally by industry analysts and commentators, as hundreds of millions of new consumers around the globe are set to purchase diamonds in the coming years.
“With all this in mind, we are undertaking one of the most comprehensive programmes of investment to support long-term industry profitability ever set in motion in the diamond sector,” he said. “Because if we keep pace with this rapidly changing world then, despite our bright history, our greatest successes will lie ahead of us.”