De Beers' Penny addresses Antwerp Diamond Conference

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De Beers' Penny addresses Antwerp Diamond Conference

Successful downstream diamond industry important to Africa

October 16, 2007

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Antwerp, Belgium—The emergence of diamond-producer countries in Africa and elsewhere as major partners in the diamond industry is an important opportunity for the global industry, said De Beers Group Managing Director Gareth Penny in a speech yesterday morning at the Antwerp Diamond Conference.

"The center of gravity of the diamond business may be about to shift somewhat, but I believe that this creates real opportunities here in Antwerp and other diamond centers," Penny said. "The opening up of the producing countries with the development of new diamond centers increases those opportunities for diamantaires with the vision, creativity and willingness to invest money and effort in helping producer countries maximize their diamond resources."

He spoke about the progress that's been made in Africa in particular, challenging the perception in Europe and the United States that the continent is "hopeless."

"Twenty-five years ago, there were only three democracies in Africa: Botswana, Senegal and Mauritius. Today, more than 40 African countries have held multi-party elections," he said. "As to the 'hopeless' label, African continental economic growth last year was 5.8 percent, with the best performers closer to 7 percent."

In comparison, he said the European zone GDP had growth of 2.7 percent, and the United States had growth of 3.2 percent.

In terms of diamond-producing countries, Penny noted how changes have taken place in the Democratic Republic of Congo (with presidential elections for the first time since independence), in Sierra Leone and in Liberia. All of this progress has translated to a new determination in producer countries to ensure their natural resources benefit them.

"For the African diamond-producing countries, beneficiation is not optional, not a passing whim motivated by political correctedness, but an imperative, an absolutely essential and critical part of their macroeconomic policy designed to uplift their economies to provide education, jobs and healthcare for their people and to make poverty history," Penny said.

Penny also said that the shift taking place—and the next phase of Africa's development in the industry and the need for more foreign investment—isn't without its challenges. For instance, in attracting foreign investment, African countries come to the table without the cost advantages of centers in places such as China, India and Thailand.

Not only will investors and the country need to discover the particular segment of the diamond market they compete in, they must also continue to work with other centers throughout the world to achieve success.

Penny also discussed the importance of consumers and how maintaining their confidence in diamonds and diamond origins is crucial.

"In the end, whether we are producers, governments, mining companies, diamond manufacturers or dealers, we must always remember ultimate power rests with the consumer, and they will determine the fate of our industry," he said.

In addition to Penny, other notable speakers and panelists set to take part in day one of the conference included Nobel Prize-winning economist Joseph Stiglitz, Acting Permanent Secretary for Botswana's Ministry of Minerals, Energy and Water Kago Moshashane, World Federation of Diamond Bourses President Ernest Blom, DNC Deputy Minister of Mines Victor Kasongo and Rapaport Group Chairman Martin Rapaport.

Bob Geldof, former pop star and humanitarian, and Ellen Johnson Sirleaf, the president of Liberia and Africa's first female president, were scheduled to speak at a gala dinner held last night.

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