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Our growth in America has come from building on the core message of the diamond engagement ring, and asking when else the customer would want to hear it. We took the core promise of a diamond, and extended it to other big moments. The first, obvious one was anniversaries, with the eternity ring. In the ‘90s, we launched a self-purchasing campaign called The Right-Hand Ring, and talked about diamonds as a symbol of self-commitment. We created opportunities for the U.S. market to get bigger and bigger. Last year, the U.S. was the record of all record years for us, an extraordinarily strong year.

WWD: How did you create demand for diamonds in other markets, such as India?

S.L.: There’s an enormous history of diamonds in India. The early diamonds were discovered there, and the maharajas had all sorts of gems and jewels, including diamonds, so they were for the very elite. In the era after independence, India was really focused on export, and diamonds were viewed as an export business. We talked to the government, and said it was in their interest not only to export diamonds, but to encourage domestic demand as well, to build a market that would create employment, expand jewelry manufacturing and add value. The government agreed.

At the time, upper-middle-class Indians didn’t see diamonds as part of their lifestyle. I think we succeeded in putting diamonds into the [consumer] culture, and getting across the message that you didn’t have to be a maharaja to own them. We made them relevant, and they’ve built a big, big business there. Today, India accounts for 10 percent of the world’s diamond consumption, around $5 billion to $6 billion.

WWD: Did you use a similar playbook to build the diamond business in China?

S.L.: I’d read a cover story in The Economist about how China was going to be the next Japan in terms of consumption, and I thought, “I’d better go, and see what it’s all about.” I first flew to Beijing in 1991 and government [trade] officials sent a car to pick me up at the airport, and I remember there were no other cars around. We traveled into town on a normal road, but I could see they were building what is now the motorway from the airport — by ox. In Beijing, there was no color. Everybody wore green jackets and hats and rode bicycles. There were millions of bicycles and hardly any cars. I quickly learned there were no stores to sell diamond jewelry. I thought, “So much for The Economist.”

I couldn’t sell anything because there weren’t any stores, and the Chinese living in the country had never been exposed to diamonds. They knew from science class that diamonds were the hardest substance known to man and, strangely, that the Seven Dwarfs from “Snow White” were diamond miners. So I thought, “OK, we have to build the diamond dream” — that’s been a big phrase in my life. We have to build an understanding of the preciousness of diamonds, of their emotional value. So we built this desire and this dream and aspiration for diamonds before Chinese consumers could actually buy them. And then I had to go and persuade the big retailers in Hong Kong to build the retail network.

WWD: How did you build awareness of luxury goods you couldn’t sell?

S.L.: A Chinese television network approached me about advertising, so for $100,000, I bought a year’s TV schedule with an ad about diamonds every single day. It was on the news in the evening, watched by everyone. Later, we spent time with the creative teams working up Chinese versions of our diamond love story. But in the research, they all bombed. What the Chinese wanted was the American fairy tale, like they’d seen in movies, even though, at the time, they were not [proposing marriage] with diamonds. They kept saying to us, “Don’t make it so Chinese. Just give us the big dream.” Subsequently, as we evolved over the years, we made the advertising much more localized, and inserted diamond culture into their lives.

Today, China probably accounts for 20 percent of global diamond jewelry consumption, or about $15 billion. That market went from zero to being the number-two market in the world. I think the diamond dream got really well established, because we got in early. We were there way before any of the other luxury businesses, and we were able to create that aspiration and desired positioning. If you do surveys of Chinese consumers now and ask them about their desire for luxury, diamonds are — by a long way — the number-one preference in luxury, which is not the case in every market. In China, diamonds rule the roost. This year alone, Chow Tai Fook will open 1,000 stores.

WWD: Why did De Beers change its business model, and how did that lead to the launch of the Forevermark brand?

S.L.: Historically, De Beers would sell diamonds from its own mining operations, but it would also buy diamonds from all the other major producers. The change in the business model was driven by several things, including the conflict diamond issue. De Beers could no longer buy diamonds on the open market, not knowing their origins. We used to have buying operations all across Africa, but we couldn’t be confident in their sourcing, so we closed all of that. In the EU, our business model was always legally compliant, but we also were looking at how the evolving competition laws were going to impact us, so De Beers jettisoned the old model, and focused on selling its own production.

We were still the largest diamond company in the world, but we weren’t the majority, as we were before. Our challenge was ensuring that the category remained healthy, and that desire remained strong. And, of course, we wanted to make sure that we were the beneficiaries to a greater degree than anyone else. De Beers also felt a responsibility to its [trade] customers, and wanted them to sell diamonds with confidence, knowing they had a positive impact. We had to create a new way of marketing, and out of that grew the concept of the De Beers Forevermark brand, a marketing tool that would allow us to reinforce the core values of diamonds, and a way to help us sell the diamonds from our own production.

WWD: The launch of Forevermark in 2008 marked the first time that De Beers could handpick the best diamonds from its mines, inscribe them with ID numbers and limit their distribution to around 2,000 jewelers. What did it mean for De Beers to “brand” its diamonds?

S.L.: Forevermark was well-timed because it was the beginning of what we now see is the the “branded era” for diamond jewelry. Forevermark gave the diamond jewelry retailers, which were largely independent, unbranded players, the power of a [name]. We started marketing Forevermark, which is now a billion-dollar business, in the East because Hong Kong and China were less affected [by the 2008 crash and the ensuing recession]. Retailers there were used to the unbranded diamond world, so we did have to sell the vision of why we thought Forevermark would be their future, and a very powerful tool for them.

WWD: Can you talk about the new De Beers Code of Origin pilot program, which was partly inspired by Forevermark and is part of your wider Building Forever strategy?

S.L.: We’ve been testing Code of Origin for the last 18 months with a select number of our clients, and we’ll be pretty much ready to go from April or May of this year. We’ll work with our sightholders to upload information about the diamonds onto the blockchain, and then inform the retailers how they can find a diamond’s history. The diamonds will have a certificate linked to a QR code that then opens up content about their journey.

In general, in the luxury goods world, people want to know more about where their products come from, and the impact that they’ve had, which is driven, in part, by the climate change agenda. De Beers is very well-positioned, because of our investment in the blockchain and the technology that enables our product to be tracked.

WWD: Can you talk about Lightbox, your thoughts about lab-grown diamonds, and how they compare to mined rocks?

S.L.: The Lightbox launch emanated from the need to participate, and help create, a new market with different attributes and different needs. De Beers has a long experience in manufacturing lab-grown diamonds, and we didn’t want the market to become a wild west of misinformation. We knew there was an opportunity for lab-grown diamonds, but we don’t think they offer the same thing as a natural diamond. The very simple fact is this: one is inherently rare because nature made it a billion years ago. The other is lab grown, which we can make increasingly inexpensively. You can make as many as you want. We knew the two product categories would diverge. We also knew there would be a lot of confusion in the interim.

There is still confusion, probably more than we would have hoped for.

We think Lightbox is an exciting opportunity, but it also seeks to be an honest broker with the consumer and transparent about what it is. There are a lot of interesting things you can do with lab-grown diamonds, with color and accessible price points. But they’re not inherently precious, or of enduring value. I worry about consumers spending, in some cases, extraordinary sums for products that Lightbox would sell for a quarter of the price. What are the consumers going to think in five years? And was the jeweler who sold them the item transparent about pricing? If you look at natural diamond prices over the past year, they’re probably 20 to 25 percent higher than a year ago. Over the last 15 months, lab-grown prices are down between 55 and 60 percent.

WWD: As a mining business, your sustainability goals and strategies are different from those of most luxury brands. Can you talk about some of the sustainability projects De Beers is working on right now?

S.L.: Climate change wasn’t on our agenda, historically, and that’s an area where Anglo American has been hugely beneficial. Their investment in technology can help our mining operations become carbon neutral by 2030. We wouldn’t have been able to do that without them. To that end, we’re developing our own sources of renewable energy, largely from solar and wind, so we don’t have to take power from the grid. The challenge is battery storage because we operate 24 hours, and we need the energy to be consistent. We’re building our first solar energy plants now in southern Africa.

The second thing we’re doing is converting our trucks from diesel to electric, and Anglo is a leader. They’ve invested in hydrogen-powered trucks and they have prototypes that work. The advantage of hydrogen power is that, in the end, the only thing that comes out is water, and it can run for longer than electric batteries.

We don’t like the idea of buying carbon offsets, so we’re looking for all sorts of ways to offset our operations. One of them is working with kimberlite, the rock we extract the diamonds from, which naturally absorbs, and stores, CO2. And we have trials in place in Canada and South Africa looking at how we can accelerate the speed at which kimberlite can absorb CO2.

We’re also working on a project in Namibia, where we’ve been retrieving diamonds from the beach and from the sea with mining vessels. We’ve worked out that giant kelp growing underwater absorb CO2 in the same way the trees do, so we’re looking at whether we can plant kelp in the areas where we mine.

WWD: Can you talk about your work with employees and communities in southern Africa?

S.L.: About 90 percent of our employees are from southern Africa, and you could not operate in the region without getting involved with the local communities, and trying to protect your people as best you can. We were very early in providing free [HIV and AIDS] testing and anti-viral treatment to our employees and their families. Each year, we have a drive to make sure we’re hitting high numbers [of testing and treating HIV infections]. The drive has been very successful, and has had a huge impact on reducing transmission of the virus, and stopping people from dying.

WWD: What kind of work did De Beers do during the COVID-19 pandemic?

S.L.: Africa was late to get vaccines, and there were people in our communities in southern Africa dying because of that. I can’t tell you the frustration we had because we couldn’t acquire the vaccines as a private company. We had to wait until the governments could get them, and then we could deliver them. We have an infrastructure that can augment the countries’ health care systems, and so we vaccinated in the mines and in the communities. According to the latest figures I have just seen, 97 percent of our employees in southern Africa have been vaccinated.

WWD: As chairman of the Natural Diamond Council, can you talk about the impact of the war in Ukraine on Alrosa, the diamond mining company that’s partially owned by the Russian state?

S.L.: Alrosa took the step of understanding that the Natural Diamond Council cannot operate with them, so they voluntarily suspended their membership and their funding. The council now is able to do its work to the benefit of its members who are mining in southern Africa and Canada. It’s important for the council to be able to carry on.

At the moment, sanctions against Alrosa are largely related to their ability to raise funding, and that could impact them in the medium- to long-term, in terms of investment into new projects. It could also impact on their ability to supply, and to source mining technology globally.

The current sanctions don’t prohibit Alrosa from selling diamonds into the world, although it’s not so clear how they’ll get paid. In the medium run, it’ll depend on how consumers act. Alrosa accounts for about a quarter of the world’s diamond production and right now China, India and the Middle East collectively account for about 40 percent of consumer demand. We’ll have to see what happens in the West and how the industry will segment the product, and provide diamonds to different markets.

In every other situation where Russia has a productive capacity, and the goods don’t make it to market, the value of the non-Russian assets goes up. There are a lot of markets that aren’t going to follow the EU and US lead [on sanctions] and some consumers aren’t going to be influenced by them. So it may be that the overall supply and demand is not really impacted.

WWD: What sort of advice are you giving your successor, Marc Jacheet, who’s arrived from Tiffany & Co.?

S.L.: The most important one is always to remember what I call the “diamond dream.” All of the De Beers’ business is based fundamentally upon that. All value in our industry, everything, flows from that. The diamond dream is that unique combination of the preciousness, the inherent value, the elegance and the sheer feeling that people get when they wear a diamond. It’s the feeling, the emotion, more than the appearance. The real thing is what diamonds mean to people, and your fundamental job is to make sure that dream is as alive and well. We are the caretakers of this dream.

WWD: What about the industry clients? What skills do you need to work with sightholders and jewelers?

S.L.: You need to inspire people. This is an industry of entrepreneurial characters, and there are big egos everywhere. That’s the nature of our sector, and it helps to be a bit humble in dealing with them. They know how to make money, they have businesses worth multimillions of dollars, so you need to give them a vision and inspire them, make sure they understand what the dream is.