FT learns of De Beers' difficulties in selling $2 billion worth of diamond reserves

Against the backdrop of generally low demand for gems, diamond mining group De Beers has accumulated the largest stockpile of unsold diamonds since the 2008 financial crisis, worth $2 billion, which are difficult to sell. This was reported by the Financial Times (FT) on December 25.

According to the media outlet, the difficulty in selling diamonds was caused by a drop in sales of precious stones in China, as well as increased competition from laboratories that grow diamonds artificially. In addition, the impact of the coronavirus pandemic, in which the number of marriage ceremonies declined and, consequently, the demand for buying engagement rings decreased.

"It was a disappointing year for rough diamond sales," De Beers CEO Al Cook stated.

Due to the fall in popularity of buying diamonds, De Beers was forced to reduce its production of the stones by 20 percent, as well as lower auction prices for them, the FT adds. In addition, the company's revenue in the first half of this year amounted to $2.2 billion, compared to $2.8 billion in the same period last year.

Earlier, on December 19, Russian Finance Minister and head of Alrosa's supervisory board Anton Siluanov said that Russian diamond miners, facing sanctions from the G7 countries, will redirect their products to other markets. He expressed confidence that such a measure would not benefit those who imposed the sanctions. Siluanov clarified that the market for rough and polished diamonds is roughly clear and on the whole the situation there is stable.

On December 18, the European Union approved the 12th package of anti-Russian sanctions. Restrictions imply new export restrictions against Russia on dual-use products and technologies, as well as a ban on the direct or indirect import, purchase or transfer of polished diamonds, including jewelry, from Russia.

Before that, on December 6, Russian presidential spokesman Dmitry Peskov, commenting on the G7's plans to impose new sanctions on diamonds, noted that this has not been news for a long time. He added that Russian companies, aware of this, are trying to hedge their risks. At the same time, he said on November 20 that the EU sanctions on Russian diamonds will hit the Europeans themselves.

Back in December 2023, De Beers CEO Al Cook said that his company's customs service would not be able to distinguish a Russian-made diamond from any other. He specified that it was unclear to him how the system for tracking diamonds that were produced in Russia worked.