Diamonds in the rough: The FT chats to De Beers CEO Al Cook

Al Cook, CEO of De Beers, faces a daunting challenge amid a surge in lab-grown diamonds threatening the traditional allure of natural gems. A seasoned geologist with a background in oil and gas, Cook steers the world's largest diamond miner through pandemic-induced market fluctuations. Despite skepticism, Cook brings a retail perspective, reviving iconic campaigns to rekindle diamond desirability. As he navigates De Beers' complex landscape, Cook's leadership style is tested, blending passion, adaptability, and a focus on building collaboration within the industry..Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here..De Beers chief Al Cook seeks to restore allure of diamonds.By Anjli Raval and Harry Dempsey.Mining boss faces battle as lab-grown alternatives proliferate.When a hulking container ship was 23 minutes away from crashing into the Cleeton natural gas platform in the North Sea, it was Al Cook's first night as a manager of the offshore installation operated by BP..___STEADY_PAYWALL___.Lifeboats were ready to launch, RAF rescue helicopters called and flares sent over the vessel. A voice finally crackled over the radio: the captain saying he had set his course on the light of Cleeton and fallen asleep at the wheel..The ship ultimately turned and narrowly missed the platform. "You could read the symbols on every container," said Cook. His emergency response, which spared the lives of 64 crew members, has had a lasting effect on his professional life, making him confident he can thrive under pressure. "I won't panic," he said..It is a skill the 48-year-old will need plenty of in his role as chief executive of De Beers, the world's biggest diamond miner by value. Already, Cook has had to keep his cool to seal a years-long negotiation with the Botswana government over a sales agreement and mining licence as the African country's president threatened to walk away..A pressing challenge now is reversing a pandemic-related drop in demand for diamonds. "People didn't meet each other, people couldn't date. It all stopped," said Cook. "It'll probably take another two to three years to get back [to where things were].".Cook, a geologist by training who started in his role in February after almost three decades in the oil and gas industry, observed how his move to De Beers took him from "an industry producing something everyone needs but no one wants to [one] producing something everyone wants, but no one needs"..Similarities exist between the two extractive industries, including working with governments, executing long-term projects, navigating economic cycles and political crises. But the world of mining, luxury retail and diamonds is new to Cook — and he enters it at a time of huge upheaval..The chief executive, a natural storyteller, hopes diamonds can regain their former allure even though some in the industry believe there has been a structural shift due to a surge in the availability of lab-grown gems. Anglo American, the diamond miner's British owner, this month unveiled $100mn of cost cuts for lossmaking De Beers as the business struggles with a deeper than expected downturn in sales..Read more: Unveiling the extraordinary life of Harry Oppenheimer – diamonds, gold, and a legacy defined by power and politics.Cook believes the company can sell its message better and has brought back the iconic "A Diamond is Forever" advertising campaign for the holiday season. Taking a leaf out of the playbook of retailers rather than miners, he stresses the history of diamonds — from a talisman of strength for warriors to a symbol of love. At a time when you can buy everything so quickly, it is about reminding people of the "timelessness of a unique piece of jewellery," he said..The chief executive, a father of three, is eager, amiable and likes convening people to solve problems. Investors who know him praise his self-belief. But some former colleagues said his approach bordered on arrogance. A few industry executives believe he is out of his depth.."He has stepped in at a challenging time," said Mark Cutifani, the former chief executive of Anglo, who got to know Cook on a board of directors for a charity. He had considered asking Cook to join the British miner in a technical or sustainability role — an easier transition from the oil and gas industry. "Running De Beers is altogether a big step," said Cutifani, who is now chair of Vale Base Metals, a competitor. "Diamonds is such a different business . . . It's not the route I would have brought him in through.".A separate challenge for Cook has been trying to gain the respect of more than 20,000 De Beers employees, many of whom are industry lifers, unlike himself. Cook's strategy has been to acknowledge that his new colleagues, from mining engineers and traders to jewellery designers, "are far better at what they do than I am and I will ever be . . . but what I can do is bring everyone together, and let's see if we can create some magic.".A day in the life of Al Cook.I'm rubbish at waking up. I'm a night owl. I can work into any hour of the evening, but I struggle in the morning. By the time I actually get up, it's 7am..I try to see the kids before school and then I take the tube to the office. I like to get in an hour or so before meetings start. On a good day, I think about longer-term strategy. On a more normal day, I just deal with what happened overnight..I travel about 50 per cent of my time. Before the Botswana deal, it was more like two-thirds. International business and particularly diamonds relies on face-to-face conversations far more than many other industries..My day is a mixture of four things: learning and meeting people; considering how to shape the company over 10-20 years; making sure we maintain our strong financial position and, as CEO, managing performance of his top team and making sure there's clear accountability. .His job as chief executive is "not so much about having the best understanding of diamonds," he said. "It's about the ability to take an idea, turn it into strategy, turn it into a plan with milestones and then deliver the thing.".For Cook, lab grown diamonds are not special. They are sparkly, fun, abundant and quick to make. "They're a bit like crystal. You can produce as much of it as you want". Natural diamonds are rare. "In an age when people have an incredible choice of what they spend their money on, there's something really special about the hardest material on planet earth," he added..Read more: SA's third big Jackpot: First Diamonds, then Gold, now it's Oil from West Coast, Karoo – Lorimer.But people are more cost conscious and many are choosing alternative ways to symbolise their commitment to one another. Lab-grown diamonds are particularly cutting into demand for one or two carat solitaire stones popular in the US for engagement rings..De Beers has experimented with lab-grown diamonds through its Lightbox brand since 2018, but pulled back in September from a three-month trial selling engagement rings containing man-made stones. These diamonds are getting cheaper and profits are diminishing, Cook noted..Some industry experts are not convinced there will be a rush away from man made diamonds, particularly given the negative environmental and social impact of natural stones. In September, at least 20 De Beers diamond mine workers were killed in a bus crash in South Africa. "It was horrific," said Cook, recalling the moment he found out..One boost for De Beers is the lack of new diamond mines that have been discovered and developed in the past decade, which is likely to naturally constrain supply..De Beers' monopoly over global diamond supply was eroded by the emergence of Russia's Alrosa, now the world's largest producer by carats and second largest by value, after the collapse of the Soviet Union..However, concerns over monopolistic behaviours have continued to dog De Beers and antitrust concerns have prevented it from taking a robust moral stance on Russian diamonds, which have been boycotted by western jewellery retailers and this month hit with an import ban by the G7..The exact system for tracking stones has not been made clear. "With the best will in the world, the average customs agent will not be able to look at one diamond and another diamond and go, 'That's the Russian one'," said Cook..One person who works closely with the chief executive at De Beers said he was a "quick learner" who was hired for his ability to form and maintain partnerships..That will be tested as Cook navigates De Beers' relationship with Anglo American. Some analysts have asked whether the mining group should overhaul its portfolio and sell De Beers, which it took full control of in 2011 from the founding Oppenheimer family..Cook, who has lived in seven countries, has always been ambitious: as a child, he wanted to be UN secretary-general..He admits his passion for work can be challenging for his employees. "I think [colleagues] would say about me that 'sometimes he gets so passionate and interested in things that our patience wears out before his. Another question, really? Another email at 11 o'clock at night?' I don't think they'd criticise me for lack of enthusiasm.".He is aware that what it means to be a leader has changed dramatically from "two-dimensional figures of glory" to "three-dimensional people who have as many flaws as they have great traits". He has several confidants, including Amber Rudd, the former British politician who is on an advisory board for Equinor..His children, including his 16-year-old daughter, are another source of candid feedback. "I get more critical areas for improvement from her than I do in the company," said Cook. "I worry a lot more about the views of my family than I do about the views of the board of De Beers . . . if I let down my family, they'd be far quicker to tell me.".Read also:.Flash Briefing: Load shedding to continue; Aspen SA adds anaesthetics; former Eskom CEO Koko allegedly 'cooked the books'Inside the 'izinyoka' – copper thieving gangs collapsing SA's infrastructure. Brilliant.🔒 NMR's Team Carter survives onslaught – With insights from The Wall Street Journal.© 2023 The Financial Times Ltd.

Diamonds in the rough: The FT chats to De Beers CEO Al Cook

De Beers chief Al Cook seeks to restore allure of diamonds

Related Stories