The economic crisis presents challenges for the luxury goods category as a whole, diamonds however are uniquely positioned to withstand and emerge from the short-term uncertainty. Stephen Lussier, Executive Director of De Beers, said at the Mining Indaba on Tuesday stating that diamonds will prove to be a store of value. Lussier mentioned that we are facing extraordinary times and that De Beers would take bold actions in order to produce a relevant product. The challenges the diamond market is facing are numerous but Lussier outlined just a few of them, citing the speed at which the industry was hit. As well as the fact that the duration of the effect is said to be long-term. "Any action that the company takes now will have to be sustained throughout the years." "We have taken tough decisions in the good times helping us to prepare our portfolio for less favourable conditions," he said. He continued to say that De Beers will reduce production significantly in accordance with diamond client demand, and will continue to substantially reduce capital expenditure and off-mine costs such as explorations. Lussier said that there is no point in digging diamonds out of the ground if there is no demand for them, therefore they will be more valuable if they stay underground. Lussier said that diamonds are a rare and finite treasure and, with future demand growth in emerging markets; demand is likely to significantly outpace what is forecast to be lower levels of diamond supply for many years to come. Although demand for diamonds has decreased De Beers plans to stimulate demand and protect diamond equity. When asked how the company will do this Lussier mentioned that it has launched a new programme in China and it is spending a lot on advertising. "As the hardest material on Earth, diamonds represent a reliable asset for people migrating away from debt, risk and the complexity of the stock exchange," said Lussier. Historically, there has been incremental growth and low volatility in the prices of diamonds, making them attractive in the long term. Diamonds are timeless, people still get engaged and married and diamonds are linked to the marriage tradition in the US and emerging economies. Lussier finally said, "few in the industry have experienced the tough trading conditions we are currently seeing. De Beers is fortunate to have a foundation built over 120 years that enables us to draw on our past, take bold action in the present, with a view to securing a bright future. " There are only two things in life that last longer than time, love and diamonds.

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