De Beers is turning to cutting edge technology of a different kind to help build and maintain trust and confidence in the US$80 billion diamond industry.
The world’s leading diamond company, which has mines in Kimberley, Venetia and Voorspoed, recently unveiled a blockchain-based platform, which could prove a template for mining and other industries.
What is the De Beers blockchain platform?
Blockchain is the technology behind bitcoin – the cryptocurrency that was the talk of traders worldwide in 2017 – and acts as a database in which transactions and events are securely registered in a database.
The chain can log every activity in order, alongside details of who did what. In terms of diamonds, this should provide a traceable record for stakeholders, businesses and consumers who can then verify that their diamonds are both responsibly sourced and the genuine article.
All this is to be done without revealing sensitive details, maintaining the balance of probity and privacy that is essential for the diamond industry.
De Beers CEO Bruce Cleaver explained : “As the first traceability platform to span the entire diamond value chain, the solution we are developing aims to provide unprecedented levels of confidence and assurance for all stakeholders.
Imagine a world where the unique journey of a diamond, from its beginnings as an unpolished gift of nature to its ultimate purchase as a symbol of life’s most meaningful moments, can be captured in a way that is as everlasting as the diamond itself.”
He added: “Most importantly, the traceability platform will be inclusive – a shared resource for registered members of the diamond industry, benefiting all those who expect to buy and sell with confidence.”
The wider significance of blockchain technology
Yet even before the platform becomes widespread, there’s already talk of its used beyond the diamond industry. This is making everyone, including trading companies in South Africa and beyond, stand up and take notice of its potential.
Cleaver himself explained: “Once established, the blockchain will operate as a shared platform, on top of which a range of solutions could be built.
It can be thought of as akin to a smartphone and a range of apps – once the base blockchain technology is established, participants in the ecosystem can build applications for various uses, whether that’s as a trading platform, financial assurance tool or consumer-facing solution.”
De Beers’ chief financial officer Nimesh Patel told told City AM that he is talking to parent company Anglo American about how this could be used in other businesses.
City AM highlighted the example of The Democratic Republic of Congo and issues which have dogged the sourcing of cobalt – two thirds of which is supplied by the African country.
Human rights concerns are currently causing some investors to consider looking elsewhere for the mineral used in rechargeable batteries.
Industries with sourcing concerns, or those engaged in trading and financial assurance, could soon be taking the De Beers template to tackle trust concerns for companies and consumers alike.
It all means that this technology – and this test case – could be very lucrative indeed in the coming years.