De Beers has appointed Al Cook to the top job at one of the world’s largest diamond producers, hiring externally from the oil and gas industry to replace Bruce Cleaver after seven years at the helm.
Cook, whose 25 years in the energy industry most recently included heading Norwegian oil major Equinor’s exploration and production business, will join as chief executive early next year, the diamond group said on Monday.
Cleaver will become co-chair after navigating a tricky period for the diamond industry in which he focused on introducing technology to prove the provenance of De Beer’s stones and revamping its sales agreements.
Duncan Wanblad, chief executive of De Beers’ owner Anglo American, said Cleaver had “successfully steered De Beers through a period of considerable change”.
Cook will become the third chief executive of De Beers since 2012 when Anglo bought the Oppenheimers’ stake, bringing an end to 80 years of control under the South African billionaire family.
Before joining Equinor, Cook spent 20 years at BP, including serving as former chief executive Bob Dudley’s chief of staff.
The handover comes after a difficult period for De Beers, whose share of Anglo’s earnings has shrunk to 5 per cent from 23 per cent in 2016, according to Berenberg, with diamond prices slumping on weaker demand in China and oversupply for polishers and cutters.
“De Beers has underperformed from a return on capital standpoint for many years after being one of the pillars that kept Anglo American supported in a really terrible time around 2015,” said Richard Hatch, analyst at Berenberg.
The diamond market is under pressure as China continues to pursue its zero-covid policy and inflation squeezes consumer spending in the west.
However, uncertainty over Russian gemstone supply has boosted demand for De Beers’ diamonds in recent months, helping earnings before tax and interest almost double to $718mn in the first half of the year. US jewellers have boycotted supplies from Russian rival Alrosa and western governments have weighed up further sanctions against Moscow that could target precious stones.
Analysts and investors said Cook will bring an ability to manage relations with governments in South Africa, Botswana and Namibia, where De Beers operates, but noted that he lacked a background in luxury consumer goods.
“He is a deep strategic thinker, which is what De Beers needs. There are remarkable similarities between the oil business and the diamond business, which is what makes this a sensible appointment,” said one top Anglo American shareholder. “There is a consumer-facing luxury brand component here though, and this is something where he doesn’t have experience.”
