Industry News by Nemesis

Rapaport Calls for Resignation of De Beers CEO

November 25, 2015

DeBeers rough diamond sales expected to fall by at least 60% n 2H-2015. Artificially high rough prices destroying diamond trade liquidity and profitability.

 

The Rapaport Group has today released an important article “Rough Bubble Bust” by Martin Rapaport.

 

It is available at http://www.diamonds.net/Docs/Alerts/Rapaport_RoughBubbleBust_112415.pdf.

The article details how and why rough diamond prices have been manipulated to artificially high unsustainable levels and the negative impact this is having on the profitability, liquidity and viability of the diamond trade. The fact that rough prices are significantly higher than resultant polished prices is reducing De Beers sales and profits. De Beer’s suspension of purchases and payments for Botswana diamonds is also having a negative impact on the country.

“The rough diamond distribution system is collapsing as De Beers and other mining companies attempt to force unsustainable artificially high rough diamond prices on the diamond trade. Rough prices are higher than polished prices, which have come down to realistic levels due to the downturn in the global economy. The mining company’s refusal to lower rough prices is destroying the diamond trade, creating severe financial losses, illiquidity, supply shortages, and the loss of tens of thousands of jobs. DeBeers must immediately inject liquidity into the diamond trade by reducing rough diamond prices 30-50%. There is no justification for rough prices higher than polished diamond prices. Without a viable, profitable and sustainable diamond trade distributing their diamonds, De Beers diamond mines are worthless,” said Martin Rapaport Chairman of the Rapaport Group. 

Rapaport Media Contacts: media@diamonds.net
International: Gabriella Laster +1-718-521-4976
U.S.: Sherri Hendricks +1-702-893-9400
India: Manisha Mehta +91-97699-30065
 

Source: Rapaport

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