Gareth Penny New De Beers Head—South Africa Not Happy

Gareth Penny, the architect of De Beers' Supplier of Choice policy, has been named the company's managing director (an English title that translates in the United States as "president"). But already his appointment is causing controversy.

South Africa's Deputy Minister of Minerals Lulu Xingwana blasted the choice as symptomatic of De Beers' neglect of the country's black majority. "Today we again express our exasperation and disappointment by De Beers' announcement that it will replace one white male managing director with another white male managing director," she told Parliament to wide applause. "This is the same company whose board of directors is lily-white and male dominated. … I ask you, De Beers, is this how you show commitment to transformation?"

Those remarks were seemingly backed up by Xingwana's boss, Minerals and Energy Minister Phumzile Mlambo-Ngcuka, who after the speech told the country's press: "The deputy minister doesn't lie."

De Beers is based in South Africa and has five mines in the country. It has been under growing pressure to increase black participation in both the cutting industry and its upper echelons. De Beers declined comment on the remarks.

Despite the controversy, Penny's eventual ascension to the top job was not unexpected. A 42-year-old former Rhodes scholar, Penny is currently managing director of the Diamond Trading Company, De Beers' sales and marketing division. He was appointed manager in charge of the De Beers Strategic Review in 2001. Early in his career he served as assistant to former

De Beers and Anglo-American chairman Julian Ogilvie Thompson.

Penny will report to company chairman Nicky Oppenheimer. He replaces Gary Ralfe, who will retire in February 2006.