It would be interesting to witness the reactions of senior De Beers' management past and present when news is announced of a major diamond find at a mine that it sold off at some point in the past. The thought occurred to me this week after Gem Diamonds said it had found a 125-carat rough stone at the Letseng mine in the mountains of land-locked Lesotho.

 

In an extraordinary run of finds, the stone was the 15^th rough diamond weighing more than 100 carats that Gem Diamonds found in 2018.

 

I imagine there are few of us who has not made a wrong financial decision at some time, such as a certain share that looked certain to rise further bought several weeks or months before it started a long-term decline.

 

Not that it's a new question for De Beers: I asked former De Beers CEO Gareth Penny and Stephen Lussier, the company's Chief Executive, Forevermark and Executive Vice-President, Marketing, the very same question a decade ago.

 

Does the mining giant regret selling off mines that have produced exceptional diamonds within years of being sold off? After all, the Cullinan mine in South Africa, sold to Petra Diamonds, produced a 122-carat blue diamond in 2010, as well as a 39-carat stone, and a 138-carat white stone in 2016. Not forgetting, of course, the 507-carat Cullinan Heritage diamond.

 

As for the Letseng mine, it produced the 478-carat Leseli la Letseng white diamond, the world's 20th largest rough gem diamond and the third major recovery from the Letseng Mine in as many years a decade ago. It followed the 603-carat Lesotho Promise (the 14th largest stone) and the 493-carat Letseng Legacy (the 18th largest diamond) recovered in 2006 and 2007, respectively. The Letseng mine has produced four of the world's 20 largest rough gem diamonds and the three largest gem diamonds recovered this century. 

 

For De Beers, though, it's a question of mining at a scale that is commercially viable, in huge operations such as the Jwaneng mine in Botswana and the Venetia mine in South Africa where it has invested huge amounts of money to keep the operations going. Those, and other mines, produce the range of diamonds that the miner is looking for and which fit its clients' demands.

 

The Letseng mine is the highest altitude mine in the world and one of the coldest spots on the African continent at 3,100 meters above sea levels. And though it made produce stunning large diamonds, it has low grade ore. In other words, the opposite of what a miner of the size of De Beers is looking for.

 

Finding a world-breaking diamond once a month or so, but relatively small amounts of the type of goods used in 99% of the jewelry bought daily is clearly not a business strategy for what is still regarded as the world's leading diamond miner. De Beers needs to produce millions of carats of goods in order to fulfill commitments to its customers at 10 sales per year.

 

Huge diamonds may capture the headlines and sell for tens of millions of dollars, but they are of little value for most rough diamond buyers.