Blockchain boom won't be confined to the diamond sector, De Beers exec says

Courtney Goldsmith
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De Beers is the world's largest diamond producer by value (Source: Getty)

A top boss at De Beers expects the company's blockchain-backed diamond platform to be used more broadly across the mining sector.

The world's top diamond supplier is building a platform to enable an industry-wide permanent, traceable record for gemstones so stakeholders, businesses and consumers can verify diamonds are genuine and responsibly sourced.

"What we’re doing here is innovating a technology with a specific application for our industry, but actually my strong sense is that if this works it could have much broader applications in other industries. And we’re confident it will work," De Beers' chief financial officer Nimesh Patel told City AM.

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Diamonds are not the only commodity haunted by sourcing issues. The Democratic Republic of Congo, which supplies two thirds of the world's cobalt - a key element in rechargeable batteries - has been criticised for human rights abuses, including using child labour, causing firms to look for alternate routes to the hot commodity.

Patel said De Beers is talking with its parent company Anglo American about how the blockchain project could impact its business, and the company is also thinking about where the project could have implications outside of the mining industry.

However, for now the focus remains solely on the diamond industry, Patel said.

The project is currently in a pilot phase with a number of sightholders, or accredited diamond buyers, and industry bodies involved.

Patel said De Beers had made a "meaningful" investment into the project so far, adding that ultimately, the platform will be accessible by the entire industry and governed by an independent foundation. So far, the industry has been supportive of the project. "They see there is substance behind this, and they see the value," he said.

De Beers has previously said a range of other applications could be built on top of the blockchain-based platform, including a trading platform, financial assurance tool or consumer-facing solution.

The diamond producer today announced revenues of $5.8bn (£4.2bn) for the year to the end of December 2017, down four per cent from the previous year as expected due to a one-off industry restocking in 2016.

Patel said the company had built on 2016's momentum to produce a strong set of results, with production volume up 22 per cent to 33.5m carats.

He added that preliminary data suggested consumer demand for diamonds rose in 2017, recovering from a flat year in 2016 and a decline in 2015, and De Beers' outlook remains bullish going forward.

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