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Monopoly Through Financial Strength and Government
Support
De Beers could teach OPEC a thing or two about how to
maintain a cartel. It controls 80% of the world's diamond supply through
only 20% of De Beers gems come from its own mines. It controls the
world's diamond trade through indirect levers. Some nations, such as
Botswana sell 100% of their production to De Beers. Through its London
based marketing arm, the Central Selling Organization or CSO, its has
struck contracts with most of the world's major diamond producers to buy
and market their gems. The arrangement not only guarantees producers
that they will not be stuck with holding un-sellable gems but allows De
Beers to carefully regulate the world's gem supply. In London, it
directly exerts pressure on diamond wholesalers and manufacturers
through the Diamond Trading Corporation or DTC at its London sites. It
feeds out the goods at such rates as it determines, at whatever price it
dictates or to whichever of the thousands of diamond cutting enterprises
it favors. It decides the fate of the diamond processing industry in
every country in which there is one and whether any other countries will
have significant processing industries. It directly controls the
destinies of sometimes as many as over a million diamond polishers in
the state of Gujarat in Western India alone. It determines the future of
Antwerp and it has the power to wreak havoc on the local economies of
Israel and several African countries.
Tell me about the Name De Beers
De Beers Consolidated Mines Ltd. is a business organization that has been
controlling the diamond trade world wide for the last century. Many
people tried to compete such Harry Winston for New York and the Argyle
Diamond Company of Australia ...
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The Birth of De Beers Company
in Early
1871, a diamond was found on a small hill, a mile away
from the farm house owned by De Beer brothers (whose
names were immortalized in the misspelled form of De
Beer) in the town of Vooruizicht in South Africa and
soon another was found on the farm. A throng of...
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The Oppenheimers Arrive..
Sir Ernest Oppenheimer, who came from a prosperous cigar business family
in Germany, moved as a child to South Africa to join his brothers on a
diamond farm in 1902. He started his career as a diamond sorter and grew
rapidly to own and operate the world's most powerful...
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The Long Arm of De Beers
De Beers mainly mines gem quality and industrial
diamonds, markets diamonds produced by itself and
also others, makes and sells synthetic diamond and
related international investments in mining,
industrial and finance companies. In its worldwide
operations, it has assumed many....
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Control Production and Distribution - A Double Edged
Sword
Production
The De Beers company and its subsidiaries own interests
in and operate the Bulfontein, De Beers, Dutoitpan,
Kimberly, Wesselton, Kamfersdam, Finsch, Koffiefontein,
Premier, Venetia, and Namaqualand mines in South Africa.
It also owns rights to the Voorssoed mine near...
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Distribution
As it travels from Botswana or Siberian mine to the ring
finger of the bride to be, a diamond passes through
dozens of hands, metamorphososing en route from a dull,
shapeless piece from the soil into a glittering spark of
cold fire! Yet, no matter where it ends up, the chances
are great that...
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What is Sight Holders?
In its distribution process, De Beers have commanded
absolute authority. 10 times a year, De Beers sells
boxes of rough diamonds to 160 select international
dealers and manufacturers in market rituals as sights in
London, although smaller sights are simultaneously held
in...
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The Name of the Game
For major diamond dealers, the objective is to
increase allocation of diamonds that they receive in their shoebox at each night
(Read - The Rise and Fall of Diamonds, The Shuttering of a
Brilliant Illusion by Edward Jay Epstein). It is , as one dealer put it -
"the Name of the Game"...
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Maintaining the Value of Diamonds
The multi-billion dollar business of diamonds revolves
around the attractive pebble that has a less intrinsic
value per carat. The higher value is an artificial one
and is attributable to the strong hand of De Beers. The
sights in London are not merely occasions for major
gem...
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Creating Artificial Scarcity
It is ironic that during the lifetime of Sir Ernest
Oppenheimer, De Beers never discovered a diamond mine itself. Oppenheimers saw
little point to investing profits in exploring for diamonds...
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A Diamond is Forever
De Beers launched a multi-million dollar "A Diamond is For Ever" advertising
campaign to rekindle the demand. With N.W. Iyer, its U.S. advertising agency, it
had developed aggressive campaign to promote sales of diamond anniversary rings
and jewelry for men... ...
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De Beers' Competition
De Beers has left no avenues to control, stop, take over, make friends with or
bulldoze its competitors when necessary. In 1971, it crushed Sammy Collin's
Marine Diamond....
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How did De Beers Do it?
De Beers was phenomenally successfully in crushing its competitors with the
strengths it built over 100 years through financial and relationship powers and
the business acumen that came from...
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Diamonds from New Sources
The Oppenheimers using all colonial connections of the British Empire, succeeded
in weaving all the later discoveries in Africa, the colonial administrators in
Angola, the Congo, Sierra Leone......
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Smuggling from other African Mines
The smuggling routes lead from the diamond mines and diggings in
Southern and Western Africa to entry spots such as Monroevia,
Brazzaville, Burundi and Beirut. The Belgian and other European markets
are often flooded with smuggled diamonds. The native sorters at....
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Read about Diamond History,
Diamond Trade, Buying Tips and more...
The Romans believed that diamonds brought
courage and bravery during battle. Jewish high priests used diamonds to
decide the innocence or guilt of the accused: A stone held before a
guilty person dulled and darkened; a stone held before an innocent
person glowed with increased brilliance. The Hindus believed that this
brilliant gem was created when....
Learn about Diamonds....
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Diamond Monopoly with Government Help
