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Saturday, July 24, 2010
De Beers CEO to Resign as Diamond Sales Rise 48%
De Beers said Friday that Chief Executive Officer Gareth Penny will step down later this year as the world’s largest diamond producer reported strong first-half sales results, according to news reports.
Penny, 48, headed De Beers for the past five years and will leave after leading the company through a global recession that slashed demand for diamonds, De Beers said Friday.
Chief Financial Officer Stuart Brown and Chief Commercial Officer Bruce Cleaver will act as joint-CEOs while De Beers finds a permanent successor, the company said.
Earlier, De Beers, which produces about 40 percent of the world’s diamonds, said first-half sales of unpolished and uncut stones climbed 84 percent to $2.6 billion, boosted by improved demand from Asia, the company said Friday. In addition, mining giant Anglo American plc, which owns 45 percent of De Beers, said net profits for the diamond company totaled $148 million.
Output more than doubled to 15.4 million carats as the company reopened mines in Botswana and Namibia that were shuttered as gem consumption slumped amid the recession. De Beers said sales were helped by improved retail demand, particularly in India and China, and also in the U.S., the largest market, which accounts for half of the world’s diamond demand.
While rough diamond prices have risen in the past year, returning to levels last seen in June 2008, the global economic climate remains fragile, especially in the U.S., Japan and Europe, De Beers said.
With demand recovering, De Beers expects to produce between 30 million carats and 32 million carats this year, rising to about 40 million carats next year, Penny reportedly said.
In addition to Anglo American Plc, 40 percent of the company is owned by the Oppenheimer family and Botswana controls the remaining 15 percent. Penny told Reuters on Friday that the privately owned De Beers has no intention of issuing an IPO.
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I am a freelance writer and editor who covers the luxury jewelry and watch industry for several publications, including Forbes.com the Financial Times, Hong Kong-based JewelleryNetAsiaand the Italian jewelry magazine, VO+. In addition, I have my own blog covering the jewelry and watch industry, Jewelry News Network.