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I am just a bee, going around picking at flowers and
bringing honey to De Beers...
--
One of De Beers' customers
The Diamond Cartel
De Beers, the South African
colossus that dominates the business, stretches an
intricate and close-knit worldwide diamond network that
operates in some respects on a vast industrial scale and
in others like a medieval guild. The torrent of stones
that circulates through the network moves along a path
referred to as "the pipeline" from mines to dealers to
polishing factories to jewelers to the necks and fingers
of customers—a journey that takes somewhere between one
and two years. There are many inlets to this pipeline:
vast open pits in the Arctic Circle and the Kalahari
Desert, deep underground tunnels, even floating mines
out in the South Atlantic.
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. 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 has parlayed these pieces of
crystallized carbon into multi-billion-dollar-a-year business empire.
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."
De Beers has truly a family affair. Built around the twin pillars of De
Beers Consolidated Mines Ltd. and Angelo American Corporation of South
Africa, the Oppenheimer dynasty controls most of the world's diamond
mining and trade and is one of the biggest multi-nationals. They are the
world's leading diamond producers and virtually control diamond mining
and diamond supply to the world to date. The De Beers company has been a
power unto itself since its founding in 1888. In the decades since, it
has left no borders 0 geopolitical or ideological - stand in its way of
profit. De Beers mines and markets gem-quality and industrial diamonds.
We will describe its operations of the gem-quality diamonds here...
Who was Real 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 ...
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...
Read more...
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....
Read more...
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...
Read more...
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
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."
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...
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...
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....
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...
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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De Beers - The Diamond Cartel
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