On this week’s ‘CNN Marketplace Africa’, host Eleni Giokos speaks with Bruce Cleaver, CEO De Beers, the world’s largest diamond producer by value.
The programme learns about the extent of De Beers’ production in the continent as Cleaver explains: “About 90% of our global production [is] in Southern Africa, so that's Botswana, Namibia and South Africa, and they're very important to us and we continue to invest very heavily in those countries. We're very very positive about the future of the diamond industry. We see demand will continue to grow. Consumers are perhaps different to their predecessors but they are very, very interested in diamonds, and so we're very, very positive about the medium to long term outlook for the diamond industry.”
De Beers’ recent two billion dollar project in South Africa signifies the company’s optimism for the industry as Cleaver explains the rationale for the capital expenditure: “We're spending all this money because we are so positive about the future of the diamond industry, so in Venetia in South Africa we are going underground. We have a two billion dollar project there which will take them, the life of the mine, from the early 2020's to early 2045, very exciting project.”
Namibia has also seen a significant spend from De Beers as Cleaver tells CNN: “We've just launched the most sophisticated sampling and exploration vessel we mine in the sea in Namibia that was ever built. That was about 157 million dollars that we spent.”
Cleaver tells the programme about De Beers’ quality of diamonds and their production and sales methods: “Generally speaking, we like to produce according to demand because you're, after all, only selling a diamond once, so you should sell it as best you can. That's to an extent at the margin because very large diamond mines don't operate terribly well if they are running at full production, but you know in the case of 2015 when we saw a bit of what we call indigestion in the diamond mid-stream we slowed production down a little bit in order to try and help unlock a pipeline and we were successful in doing that, so we do model our supply against what we see demand would be.”
On the rumours that De Beers is hoarding diamonds, Cleaver responds: “I can easily put that to rest, I mean we have no excess stock in the De Beers group anywhere. We probably sit at any one time on no more than 6 to 8 weeks' stock, so we are very committed to mining and selling as we mine it what we mine, so there's no truth to that at all.”
The US is the biggest market for De Beers and with other strong markets including China, The Gulf, Europe and Japan, Cleaver describes the prospects for the African market: “Africa will be a wonderful opportunity in the future. It's also going to require marketing, so it's going to require marketing investments outside of the core markets where we currently invest, and clearly, we have limited marketing dollar. I think all of us in the diamond world are going to have to think hard about how you grow new markets outside of the traditional markets and there's no reason Africa shouldn't be a very exciting market for us.”
De Beers, which is 85% owned by Anglo American, is testing a few different ways to speed up carbon capture, including pumping CO2 emissions from their power generators directly into their rock waste. They are also experimenting with microbes and different storage methods.
Cleaver describes their latest discovery: “We've found a very interesting thing which is; certain rock, including Kimberlites, which is the host rock in which diamonds come, has carbon capture capabilities, because of the nature of the rock. We've started a small project we're rolling out … probably 2018 or 2019 we'll start on one of our mines, certainly we'll reduce our carbon footprint and there's even hope that we'll start making our mines carbon neutral and that's very exciting for us.”
South Africa has twice the global average of carbon emissions per person, according to the council for scientific and industrial research. To get companies to offset their footprint means either incentivising or taxing industry. Kadri Nassiep, CEO South African National Energy Development Institute tells the programme: "It will not be economically viable unless there's a carbon tax or price and that will be the status quo for next decade or so, on one hand incentive to become energy efficient on other there's tax as deterrent to release carbon… any company that wants to get into the game early will benefit."
Off-setting its environmental footprint is a key area for De Beers, as Cleaver says: “It's very important to us that each diamond that we sell is mined and sold in the most responsible way, so we spend a lot of time focusing on reducing energy usage, reducing water usage and reducing our carbon footprint.”
De Beers hopes to have a carbon neutral mine in the next decade but that will depend on THE final cost of the project. Marketplace Africa hears from Evelyn Mervin, Geologist and project leader, De Beers, who speaks about the costing: "It might cost us dollars per ton in terms of storing but some of the bio technologies might cost us $20 per ton… and over time if there's a motivation for carbon pricing for example we'll implement more and more advanced technologies."
Mervin goes on to say: “De Beers' global emissions are about two million tons. So at our Kimberlite mine sites if we were able to carbonate about 10% of that total carbon storage potential just in the new tailings that are generated every year we would be a carbon neutral company for example.”
Deirdre Lingenfelder, Head of safety and sustainable development, De Beers elaborates on the many benefits of the project: “When we looked at the value proposition, we didn't just do a financial proposition, we do what is called a sustainability proposition which take into account reputational impacts. Mining is seen as a very intrusive and polluting sector. It's a good news story for everyone.”
‘CNN Marketplace Africa’ airs Friday 4 August at 1715 SAT on CNN International
Saturday 5 August at 1715 SAT
Sunday 6 August at 0200 and 0815 SAT
Monday 7 August at 0300 and 1845 SAT
