Consider this group of headlines from the last week or so:
The Botswana Gazette: Diamond Crisis Looms?
Financial Times: India’s Diamond Polishers Lose Their Sparkle
Business Insider: The Diamond Capital of the World Sent Out a Warning Signal
Euronews: New Shine to Global Diamond Sales
Hindu Business Line: “We see great opportunities in India and China”
Mining Weekly: Global Diamond Jewellery Demand Hits Record $81 Billion
The second group of headlines was generated by De Beers; the first came from talking to the trade.
The two clusters don’t necessarily contradict each other—diamond sales are heading up overall, even if not everyone is feeling it. The juxtaposition is also telling. At a time when the rest of the trade is reeling and scared, De Beers keeps acting as if the industry is experiencing an unprecedented boom and responding to trade concerns with unconvincing bromides. Just wait until Chinese New Year, we hear, or Valentine’s Day or the Hong Kong Show or Baselworld. And yet every one of those events has proved disappointing, and trade morale keeps getting worse and worse.
In one of his first talks as De Beers CEO, Philippe Mellier said he wanted to see his company take more of a “leadership role.” So isn’t he doing what a leader does—inspire and talk positive?
Not necessarily. During a crisis—and that looks like what we’re facing right now—leaders must have empathy. They must acknowledge what people are going through. Yes, it’s important to stay positive and hopeful and deliver the message that “we will get through this.” But the messages must have some relation to reality or they will not listened to. And they must stress that everyone is going through this together.
One problem is that the industry isn’t going through this together. As most of the industry suffers, De Beers just came off a great year. And the new leadership has clearly taken a more hard-nosed view of the relationship between De Beers and the rest of the industry. It is not just CEO Philippe Mellier’s comments to JCK; it’s the company’s reluctance to use traditional signifiers like “sightholder partners.”
Of course, one could argue whether those words ever really meant anything. Even so, their absence speaks volumes.
Eventually, this will trickle up to De Beers: The company tried to unload a large sight in March, and as much as 30 to 40 percent of it was declined. That shows, yet again, a significant and troubling disconnect between the company and the market.
The industry needs leadership. Not in the old-cartel sense, but it needs to feel that De Beers and other producers understand what is happening, that they are concerned about it, and that they will do what they can to stop this tailspin. Yes, the trade needs a morale boost. But more than that, it needs to know the people on top of the chain care.