by Leibish Polnauer & Diana Jarrett

I have to start out by saying I never missed an opportunity to bash De Beers in the
media. There is a very good reason for this, however. De Beers’ utter
mismanagement drove their colossal horde of real gems straight to the brink
of disaster.

Looking back; a timeline

In 2011, Anglo American bought a 40% stake of De Beers from the Oppenheimer family
at a time when the company’s valuation was $11-Billion.
Today De Beers entire book value has adjusted downward to $4.1-Billion. And some
potential buyers are even talking closer to $3-Billion.
The company still produces about 30% of the world's rough diamonds by volume
annually while holding a rough diamond inventory worth $2-Billion. So it begs the
question --- why has the valuation of De Beers dropped so drastically in just 14 years?

One bad move

The biggest hit to both the global diamond brand and De Beers corporate worth came
from the ill-fated decision to push LIGHTBOX, their LGD brand. Contrary to then De Beers
CEO Bruce Cleavers (2016-2023) anticipated plan, that move actually cannibalized their
natural, real diamond brand. And that one misstep cost the global diamond industry
hundreds of billions of dollars.
This was a never before heard of misconception in branding -- introducing a valueless
fake imitation into a successful authentic luxury brand.
But you cannot put the spilled milk back into the bottle again.

What’s done is done

Let's look forward and consider why Botswana and Angola want to buy De Beers now. 
For starters, Botswana’s economy is heavily dependent upon diamonds. It’s the primary
source of revenue for the entire nation. So it’s logical that they would like to control De
Beers since currently they are their main client for rough. Why shouldn’t Botswana want
a bigger slice of the supply-chain and create greater employment for their countrymen?

Then look at Angola’s ENDIAMA E.P. The state run national diamond company
reported sales of $1.5-Billion in 2023. Their financing partners in the Gulf region can
seemingly fork over the money needed to buy De Beers which they have valued at
$4.9-Billion.
So if Angola's ENDIAMA and Botswana succeed in finding a financing partner- they
would resurrect the now struggling diamond brand in Africa, producing a fresh appeal
for natural diamonds.

The real value that needs upholding within the damaged flagship is not simply diamonds
or even the possession of their mines worldwide. It is their massive client base of
Sightholders. Those key customers are buying a sight box of rough 10 times a year.
Most of them are Indians from Surat who produce 90 % of the world's polished diamond
goods and employ around 1.2 million workers.
That is where the real value of De Beers lies - The Central Seling Organization reports

 $6.6-Billion sales in 2022
 $4.3-Billion sales in 2023
 $3.29-Billion sales in 2024

The numbers speak for themselves. But the world was not buying less jewelry during
these years. Instead they purchased LGD jewelry rather than real diamonds. De Beers
gave the stamp of legitimacy to LGD by trying to promote their own LGD goods, the
LIGHTBOX.
Thank G_D that nightmarish insanity is nearly over. And now the price of LGD has
collapsed, plummeting prices by some 90%.

What is possible

If the consortium could add a luxury brand or a big jewelry retail chain to their group,
they would bring back the venerable brand founded in1888. I can see it thriving with a
fresh new start, and once again proudly proclaim that diamonds are forever.