Clifford Elphick

CLIFFORD Elphick stands as a classic example of hubris leading to nemesis. Actually, let’s make that near nemesis, because he’s still in the diamond business. Elphick was one of the “princes” at De Beers who left to found his own diamond operation in 2004. He departed after De Beers embarked on a series of radical structural changes to its business and his plan was to set up Gem Diamonds as an example of how a diamond group should be run.

It did not work out that way. He listed Gem on the London Stock Exchange in 2007, raising $635m which he proceeded to blow on the acquisition of various diamond mines around the world. All of them have been closed down or sold and Elphick is left with his original Letšeng Diamond Mine in Lesotho and the flooded Ghaghoo Diamond Mine in Botswana. Gem has been trying unsuccessfully to sell Ghaghoo for years at a knock-down price of around $3m after spending $85m in developing it. The Gem share price started trading around £11 but collapsed to £1.25 in 2009 and has stayed below £1 since 2019.

Elphick is in denial about that miserable performance, declaring in March 2022 that Gem was “grossly undervalued” and the share price was “unacceptable to be quite frank”. He added he was “at a loss” to explain the company’s valuation given the improvement in the diamond market. Clearly he has turned a “Nelsonian eye” to Gem’s performance under his management since it listed. The current downturn in the diamond market does not bode well for Letšeng, which turned loss-making in the six months to August.