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 Who
is De Beers?
Diamonds were first discovered in southern Africa in the mid-1860s on the
farm of Nicolaas and Diederick de Beer, near what is now the city of
Kimberley. Two diamond mines dug on the farm, the Kimberley and the De
Beers,
Johannes Nicholas De Beer, owner of the farm Vooruitzicht (see picture)
on which the De Beers and Kimberley mines were discovered in 1871. They
had bought this farm in 1860 from the government for GBP 50, and sold
out in 1871 to a syndicate for GBP 6,300. The brothers De Beer disappear
from history at this point, but not before giving their name to one of
the world's biggest and best-known companies...
De Beers was founded in South Africa in 1888 and today comprises rough
diamond exploration, mining and trading companies.
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 but the Oppenheimer family that controls De
Beers has prevailed in keeping a tight control over the mining and flow
of diamonds for as long as diamonds are sought after and is likely to
continue in the years to come (Click
here to read more about De Beers competition)The various companies
within the De Beers “family of companies" are responsible for around 40%
of world diamond production by value. De Beers is active in every
category of diamond mining: open-pit, underground, large-scale alluvial,
coastal and deep sea. De Beers is not involved in informal small-scale
diamond mining, which is rarely economical for large mining companies.
The Diamond Cartel
When a gang of thieves with a stolen bulldozer plowed into London's
Millennium Dome in November 2000 to steal a 203-carat diamond from a
display sponsored by De Beers, Nicky Oppenheimer, De Beers's chairman,
hailed the botched heist as wonderful publicity:
"If only we could do
this once every six months. We could do away with the advertising
department altogether."
For more than 100 years, the name De Beers has evoked
all glamour and mystery radiated by a diamond. Through
shrewd marketing and careful manipulation of the market,
the South African company...
Read more..
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...
Read more...
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...
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....
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...
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...
Read more...
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...
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...
Read more...
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"...
Read more..
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...
Read more...
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...
Read more...
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...
Read more...
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....
Read more...
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...
Read more...
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......
Read more...
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....
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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Who is De Beers?
