family had sold its stake for $5.1bn.
A former autos boss, Mellier has shrugged off personal criticism in recent months, led by Martin Rapaport, who supplies diamond data to many of De Beers' biggest buyers. In an editorial think piece, Rapaport accused Mellier of “trade exploitation” and “cannibalization”, claiming he was too tough in throttling the market to force prices higher.
Analysts close to De Beers, who say the attack was too personalised, believe Mellier was on his way out and that Rapaport aimed to deliver the final blow. That may have been self-defeating, forcing Mellier to stay on, to avoid De Beers being seen to be buffeted by the short-term pressures of the market.
Mellier is seen as thoughtful and charismatic, but too heavy-handed. In a niche industry, he has arguably never been forgiven for being the first CEO of De Beers to be appointed from outside. A mechanical engineer, Mellier spent 19 years at Ford, before spells at Renault, Volvo and Alstom, the French transport giant.
In many ways, diamonds are surprisingly like
cars, with high margins and perilously cyclical demand. Neither are seen as commoditised products, despite being churned out by the million. And both depreciate rapidly, as soon as they leave the showroom. Some in the industry even fear that Mellier has deliberately squeezed dealers, to allow De Beers to expand down the pipeline, just as carmakers run their own dealerships.
He is also accused of shaking up De Beers and “letting a lot of good people go.” Brian Beamish, for example, a longstanding link between De Beers and Anglo American, left soon after Mellier's appointment. Varda Shine, the former head of De Beers' trading arm, soon followed.
If Mellier is accused of treating the diamond industry like an industrial conveyer belt, Lussier is more sensitive to the emotional qualities that lend the industry its value.
Perhaps his greatest achievement, sources say, was the “three stone ring”, with two small diamonds hugging a larger one, symbolising the past, present and future. It was ingenious, playing to the emotional resonance of diamonds, whilst ploughing through a market surplus of small stones, after vast discoveries in Russia.
The diamond trade loved the idea and three stone rings began flying across jewellery counters, after a campaign in 2001. “It was a beautiful idea,” one dealer says. “He orchestrated everybody like a conductor. Stephen has the ability to unite the diamond trade behind an idea. He understands how to
transcend the product. His whole life, the essence of what he's done with his life, is to be passionate about diamonds.” And yet he doesn't sell diamonds, “he sells desire.”
Sources say Lussier also acted as a key link between De Beers, the Oppenheimers and lenders, as debt built up within the business, when diamond demand stalled in 2009. “Debt was right up to the gills in De Beers,” a finance source at the company says. The group was “sitting on $3.5bn of debt, burning $100m a month and the market just disappeared.”
De Beers negotiated an emergency, interest-free loan of $500m and the market quickly recovered. But once again, the group has found itself in deep water. It is grappling with a build-up of inventory, after slow sales last year, and its parent company, Anglo American, is in urgent need of cash flow, after a collapse in metal prices, from copper to iron ore.
An IPO of De Beers, easing Anglo's net debt position of $13bn, would be complex, analysts say, but not out of the question. The group has been busy shuffling personnel, appointing a new head of strategy in December and a new chief financial officer, Nimesh Patel, a former investment banker at UBS and JP Morgan. Lussier is “incredibly smart”, “well liked” and would be a popular new chief executive.
But Lussier has “long since arrived”, sources say. Even if the DPA is a big success, he is unlikely to covet a more public role at De Beers. “At this level,” the head of one diamond body says, “it's not about money. It's about legacy.”