Tiffany & Co is prepared to take an active role in funding diamond mining enterprises globally in return for preferred access to stocks of rough diamonds, Tiffany CEO Michael Kowalski told The Financial Times on Friday.



Kowalski cited “an environment of shortage” that was more acute for higher-quality diamonds, and said that while the US luxury jeweler did not intend to “bet the company” on diamond mines, the firm realized that it might be necessary to make a capital investment to secure its supply of rough diamonds.



Specifically, Kowalski said, Tiffany & Co would be prepared to conduct a deal similar to one closed this year with the Koidu diamond mine in Sierra Leone, in which the company lent the mine $50 million in exchange for the right to purchase the mine’s rough product.



According to the Tiffany CEO, the Koidu deal allowed the company to build up a stock of rough diamonds and raise its profit margins while providing a clearer perspective on changing diamond prices. Kowalski told the FT that Tiffany had conducted due diligence at the Koidu mine to ensure that its diamonds were being mined responsibly.

Tiffany lent the Koidu diamond mine $50 million in exchange for the right to buy its rough diamonds