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 Control
Production and Distribution - A Double Edged Sword
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."
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 Kroonstad.
However, to perpetrate the diamond invention, it was not
sufficient for De Beers to merely own the largest mines
that produced most of the world's diamonds. It had to
control the production of the significant sources,
including the scattered diggings in Africa and the
jungle streams of South America. It had to be able to
assure the major diamond cutters and dealers that they
had no alternative source for their diamonds other than
at Chatterhouse Street in London where diamonds are
distributed only to sight-holders. Oppenheimers
therefore negotiated a series of secret arrangements to
block the availability of diamonds from the sources that
their company did not directly own or control. In
British colonies, such as Gold Coast (now Ghana), or
Sierra Leone De Beers contracted to buy whatever
diamonds were unearthed from British mining companies,
such as Selection Trust which is held the mining
concessions there. In South America. where alluvial
diamond fields were scattered over vast areas, it
arranged deals with the local buying agents.
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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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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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...
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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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Controlling Diamond Production & Distribution
