DIAMONDS might be forever, but not necessarily for investors.
After a devastating downturn and a brutal restructuring, a question mark now exists over De Beers chairman Nicky Oppenheimer’s decision to focus the family interests on diamonds and away from general mining, which has grown stronger and emerged better from the global downturn.
Questions also exist over the company’s strategy of moving away from “single channel marketing” -— what would commonly be known as a cartel — and entering the retail business with a string of stores all over the world that have yet to demonstrate their potential.
After a huge new capital injection from its trio of shareholders this year, De Beers appears to have earned the confidence of its investors. But is this a last throw of the dice before Anglo American parts ways with its century-old partner, as it has with its gold interests in AngloGold Ashanti? [more . .