Thursday, June 13, 2024

Martin Rapaport slaps De Beers…and De Beers slaps back

The highly secretive De Beers has been slammed by a leading figure in the diamond industry, accusing the company of destroying transparency, and using its position to monopolise the industry, and threatened De Beers with an antitrust investigation.

Martin Rapaport, Chairman of Rapaport Group, last week told more than 730 jewellers and diamantaires attending his “State of the Diamond Industry” speech at the JCK show, that De Beers has to account to people where their diamonds are coming from and where the money is going to.

Rapaport began his career in the diamond industry in 1975 as an apprentice diamond cleaver in Antwerp Belgium. In 1978, he established the Rapaport Diamond Report, the primary source of diamond price and market information. In 1980, he created RapNet ÔÇô The Rapaport Network, the first and world’s largest electronic diamond trading network. RapNet currently provides daily diamond listings of 930,000 diamonds worth over $6.2 billion dollars. It has over 7,000 members of the diamond trade in 80 countries.

Rapaport, a long standing critic of De Beers, was rubbed off by mining company’s reluctance to let the retailers and manufactures identify the source of De Beers’ mined goods as from the company. De Beers has previously responded to similar concerns, noting last year that several sightholders have contacted the company requesting permission to confirm to supply chain partners that specific goods originate from a primary De Beers source.

However, the world’s largest diamond producer by value hit back and reminded them that the sightholder license stipulates that clients need consent to “represent that any particular diamond or diamonds are sourced or originate from De Beers or any member of the De Beers Group” and that doing so without consent is a violation of the Sightholder agreement. Further reminding them that sightholders currently have toolsÔÇöincluding De Beers’ Sightholder logoÔÇöto inform downstream customers (i.e. retailers) of the provenance of their goods.

“When you deny the industry the ability to identify where our diamonds come fromÔÇöand I’m talking about 43 percent of the legitimate diamonds in the worldÔÇöyou are saying, “Nobody can know where the diamonds are coming from but us, De Beers,” riled Rapaport. “De Beers is proactively destroying transparency and making source verification impossible. And yet they parade around here like they’re good guys. They are not good guys. This is the mother of evil.”

Rapaport turned up the ante, accusing De Beers of no longer leading the diamond industry, instead they lead De Beers and “their interests are not aligned with ours”. He said De Beers’ policy is “a tool, a device, it’s a way to monopolize” and said it should “expect an antitrust investigation” on this policy. “I will make sure it happens,” he said, and added he hopes to prevent De Beers from operating in the United States.

De Beers has since responded to Rapaport’s remarks, releasing a terse but loaded statement that called out Rapaport for making emotionally charged and baseless accusations. The diamond mining giant said Rapaport used his annual breakfast presentation at JCK to attack the integrity of every employee of De Beers Group, yet not inviting any employee of De Beers to offer a different point of view.

“We refuse to submit to a world in which he who shouts loudest wins. What Martin wants is to be able to market diamonds from De Beers Group, using the De Beers brand, on his platform for his benefit. We don’t think this is fair, and we told him so,” De Beers said in the statement. “Martin had planned to use the JCK Show to discuss his source certification. We engaged with Martin multiple times over several weeks, but when we did not comply with his wishes, he threatened us repeatedly. We were unmoved and we continue to be so.”

Meanwhile, still at the same breakfast hosted by Rapaport, the Sierra Leone minister of mines and mineral resources Dr. Morie Manyeh made a plea for mutual beneficial partnerships with mining companies.

“For all of the diamonds that have come out of our country, it is hard to see how little we have benefited. You see diamond-rich Koidu village. No water. No electricity. The school is nothing to write home about,” said Manyeh.

“Botswana is what it is today. They have managed their diamonds better than we have. We want schools, hospitals and good roads. The diamonds that come from us will enable our people to have a better life. The potential for diamonds and the diamond industry in the Kono district is huge. We invite you to partner with us, work with us, and let us give a human face to the diamond industry,” he added.

In April this year, Financial Times reported that De Beers will start to sell “ethically-sourced” diamonds from small-scale miners in Sierra Leone under a pilot programme that uses digital tracking. De Beers will give small miners an app and dedicated tablet as well as a diamond “toolkit” that enables the digital tracking of diamonds throughout the supply chain. The technology uses GPS locations and QR-codes to “bag and tag” diamonds, it said. The De Beers pilot is the latest initiative to clean-up global mineral supply chains and better trace material from so-called artisanal miners, who dig by hand.


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