New De Beers CEO? Oui, Peut-Être*

It has been nearly a year since Gareth Penny announced his departure, and it seems like the choice of a new CEO for the De Beers Group has been made…at least almost.

The few details that we can reveal is that he is a Frenchman, headed a large international transportation firm, including cars and trains. He does not have a background in mining or diamonds.

De Beers has been operating without a fulltime CEO since last July, when Penny’s departure was hastily announced. Chairman Nicky Oppenheimer was entrusted by the shareholders to find a new CEO, a post many vied for, both internally and externally. Oppenheimer is now being criticized for the time it took him to find a candidate to his liking.

Among the candidates were several current De Beers executives as well as quite a few outsiders, many with a background in mining and/or diamonds.

The choice of Monsieur S. (for Secret), should it be approved, is an interesting, if not a bold one, and embodies great potential. This is the first time that the Group’s top guy won’t be someone that grew up in the company or in Anglo American.

That is not necessarily bad. The industry is now on the brink of a new era. It just came out of one of the worst global economic falls in modern history, and did so nearly unscathed. Moreover, it took advantage of the opportunity and lost the fat that took the form of large inventories, wasteful operations, superfluous staff and less than efficient financing. De Beers went through the same process too.

The new, streamlined industry is embarking on a new future, and a charismatic leader at De Beers can lead the way. Someone from out of our industry can provide a fresh look at how to proceeded and invigorate our outlook, beating the drums to a new tempo as the diamond industry marches forward.

Last December we wrote here about the closure of De Beers’ generic marketing offices in the U.S., calling it the end of an era. Not only that, but the slogan ‘A Diamond is Forever’ was shelved for ‘Forevermark”, one after another mines in South Africa continue to be sold, market share is shrinking, reaching a deal with Botswana has been tough for De Beers after the old agreement lapsed in December, requiring some major concessions - and no new CEO was in sight (no pun intended).

Meanwhile, Chantal Lavoie, who has been Acting CEO of De Beers Canada for almost a year, appears to be off next month to join a junior Canadian mining operation.  Mining veteran, Tony Guthrie has been named as Lavoie's successor.

A change is certainly needed for the century old company. When will this happen, if at all? De Beers' spokeswoman Lynette Gould is mum, only willing to say that the search is well-advanced and that they hope to announce details soon. However, we have good reason to suspect that the announcement is possibly weeks, if not months away. The two other shareholders – Anglo American and the government of Botswana – need to approve the selection, and a contract with Monsieur S. still needs to be signed.

Just as the diamond industry knew how to evolve as it went through a major crisis, so can De Beers bounce back from its own dark hour. We hope this happens, and the sooner the better. Can it do it? Oui!

* Yes, maybe