De Beers Group is an international corporation that specializes in
diamond
Diamond is a Allotropes of carbon, solid form of the element carbon with its atoms arranged in a crystal structure called diamond cubic. Another solid form of carbon known as graphite is the Chemical stability, chemically stable form of car ...
mining, diamond exploitation, diamond retail, diamond trading and
industrial diamond
Diamond is a solid form of the element carbon with its atoms arranged in a crystal structure called diamond cubic. Another solid form of carbon known as graphite is the chemically stable form of carbon at room temperature and pressure, b ...
manufacturing sectors. The company is active in open-pit, large-scale alluvial and coastal mining. It operates in 35 countries and mining takes place in
Botswana
Botswana (, ), officially the Republic of Botswana ( tn, Lefatshe la Botswana, label=Setswana, ), is a landlocked country in Southern Africa. Botswana is topographically flat, with approximately 70 percent of its territory being the Kalahar ...
,
Namibia
Namibia (, ), officially the Republic of Namibia, is a country in Southern Africa. Its western border is the Atlantic Ocean. It shares land borders with Zambia and Angola to the north, Botswana to the east and South Africa to the south and ea ...
,
South Africa
South Africa, officially the Republic of South Africa (RSA), is the southernmost country in Africa. It is bounded to the south by of coastline that stretch along the South Atlantic and Indian Oceans; to the north by the neighbouring countri ...
,
Canada
Canada is a country in North America. Its ten provinces and three territories extend from the Atlantic Ocean to the Pacific Ocean and northward into the Arctic Ocean, covering over , making it the world's second-largest country by tot ...
and
Australia
Australia, officially the Commonwealth of Australia, is a Sovereign state, sovereign country comprising the mainland of the Australia (continent), Australian continent, the island of Tasmania, and numerous List of islands of Australia, sma ...
.
From its inception in 1888 until the start of the 21st century, De Beers controlled 80% to 85% of rough diamond distribution and was considered a
monopoly
A monopoly (from Greek language, Greek el, μόνος, mónos, single, alone, label=none and el, πωλεῖν, pōleîn, to sell, label=none), as described by Irving Fisher, is a market with the "absence of competition", creating a situati ...
. Competition has since dismantled the complete monopoly; the De Beers Group now sells approximately 29.5% of the world's rough diamond production by value through its global
sightholder
A sightholder is a company on the De Beers Global Sightholder Sales's (DBGSS) list of authorized bulk purchasers of rough diamonds. De Beers Group made this list, the second largest miner of diamonds. DBGSS was previously known as DTC (Diamond T ...
and auction sales businesses.
The company was founded in 1888 by British businessman
Cecil Rhodes
Cecil John Rhodes (5 July 1853 – 26 March 1902) was a British mining magnate and politician in southern Africa who served as Prime Minister of the Cape Colony from 1890 to 1896.
An ardent believer in British imperialism, Rhodes and his Br ...
, who was financed by the South African diamond magnate
Alfred Beit
Alfred Beit (15 February 1853 – 16 July 1906) was a Anglo-German gold and diamond magnate in South Africa, and a major donor and profiteer of infrastructure development on the African continent. He also donated much money to university edu ...
and the London-based
N M Rothschild & Sons
Rothschild & Co is a multinational Investment banking, investment bank and financial services company, and the flagship of the Rothschild banking group controlled by the French and British branches of the Rothschild family.
The banking business o ...
bank. In 1926,
Ernest Oppenheimer
Sir Ernest Oppenheimer (22 May 1880 – 25 November 1957), KStJ was a diamond and gold mining entrepreneur, financier and philanthropist, who controlled De Beers and founded the Anglo American Corporation of South Africa.
Career
Ernest Oppenhei ...
, a German immigrant to Britain and later South Africa who had earlier founded mining company
Anglo American with American financier
J. P. Morgan
John Pierpont Morgan Sr. (April 17, 1837 – March 31, 1913) was an American financier and investment banker who dominated corporate finance on Wall Street throughout the Gilded Age. As the head of the banking firm that ultimately became known ...
, was elected to the board of De Beers.
He built and consolidated the company's global monopoly over the diamond industry until his death in 1957. During this time, he was involved in a number of controversies, including
price fixing
Price fixing is an anticompetitive agreement between participants on the same side in a market to buy or sell a product, service, or commodity only at a fixed price, or maintain the market conditions such that the price is maintained at a given ...
and
trust
Trust often refers to:
* Trust (social science), confidence in or dependence on a person or quality
It may also refer to:
Business and law
* Trust law, a body of law under which one person holds property for the benefit of another
* Trust (bus ...
behaviour, and was accused of not releasing industrial diamonds for the U.S. war effort during World War II.
In 2011, Anglo American took control of De Beers after buying the Oppenheimers' family stake of 40% for US$5.1 billion (£3.2 billion) and increasing its stake to 85%, ending the 80-year Oppenheimer control of the company.
History
Foundation
![De Beers Consolidated Mines 1902](https://upload.wikimedia.org/wikipedia/commons/9/92/De_Beers_Consolidated_Mines_1902.jpg)
The name 'De Beers' was derived from the two
Dutch
Dutch commonly refers to:
* Something of, from, or related to the Netherlands
* Dutch people ()
* Dutch language ()
Dutch may also refer to:
Places
* Dutch, West Virginia, a community in the United States
* Pennsylvania Dutch Country
People E ...
settler
A settler is a person who has human migration, migrated to an area and established a permanent residence there, often to colonize the area.
A settler who migrates to an area previously uninhabited or sparsely inhabited may be described as a ...
s, brothers Diederik Arnoldus de Beer (1825–1878) and Johannes Nicolaas de Beer (1830–1883), who owned a South African farm named ''Vooruitzicht'' (
Dutch
Dutch commonly refers to:
* Something of, from, or related to the Netherlands
* Dutch people ()
* Dutch language ()
Dutch may also refer to:
Places
* Dutch, West Virginia, a community in the United States
* Pennsylvania Dutch Country
People E ...
for "prospect" or "outlook") near Zandfontein in the
Boshof District of
Orange Free State
The Orange Free State ( nl, Oranje Vrijstaat; af, Oranje-Vrystaat;) was an independent Boer sovereign republic under British suzerainty in Southern Africa during the second half of the 19th century, which ceased to exist after it was defeat ...
. After they discovered diamonds on their land, the increasing demands of the British government forced them to sell their farm on 31 July 1871 to merchant Alfred Johnson Ebden (1820–1908) for £6,600. ''Vooruitzicht'' would become the site of the
Big Hole
The Kimberley Mine or Tim Kuilmine ( af, Groot Gat) is an open-pit and underground mine in Kimberley, South Africa, and claimed to be the deepest hole excavated by hand, although this claim is disputed.
History and size
The first diamonds he ...
and the De Beers mine, two successful diamond mines. Their name, which was given to one of the mines, subsequently became associated with the company.
Cecil Rhodes
Cecil John Rhodes (5 July 1853 – 26 March 1902) was a British mining magnate and politician in southern Africa who served as Prime Minister of the Cape Colony from 1890 to 1896.
An ardent believer in British imperialism, Rhodes and his Br ...
, the founder of the
British South Africa Company
The British South Africa Company (BSAC or BSACo) was chartered in 1889 following the amalgamation of Cecil Rhodes' Central Search Association and the London-based Exploring Company Ltd, which had originally competed to capitalize on the expecte ...
, got his start by renting water pumps to miners during the
diamond rush
A diamond rush is a period of feverish migration of workers to an area where diamonds were newly discovered. Major diamond rushes took place in the late 19th and early 20th centuries in South Africa and South-West Africa.
Diamond rushes by chron ...
that started in 1869,
when an 83.5
carat diamond called the '
Star of South Africa' was found at
Hopetown
Hopetown is a town which lies at the edge of the Great Karoo in South Africa's Northern Cape province. It is situated on an arid slope leading down to the Orange River. The first diamond discovered in South Africa, the Eureka Diamond, was fo ...
near the
Orange River
The Orange River (from Afrikaans/Dutch: ''Oranjerivier'') is a river in Southern Africa. It is the longest river in South Africa. With a total length of , the Orange River Basin extends from Lesotho into South Africa and Namibia to the north ...
in South Africa.
He invested the profits of this operation into buying up
claims
Claim may refer to:
* Claim (legal)
* Claim of Right Act 1689
* Claims-based identity
* Claim (philosophy)
* Land claim
* A ''main contention'', see conclusion of law
* Patent claim
* The assertion of a proposition; see Douglas N. Walton
* A righ ...
of small mining operators, with his operations soon expanding into a separate mining company.
He soon secured funding from the
Rothschild family
The Rothschild family ( , ) is a wealthy Ashkenazi Jewish family originally from Frankfurt that rose to prominence with Mayer Amschel Rothschild (1744–1812), a court factor to the German Landgraves of Hesse-Kassel in the Free City of F ...
, who would finance his business expansion.
De Beers Consolidated Mines was formed in 1888 by the merger of the companies of
Barney Barnato and Cecil Rhodes, by which time the company was the sole owner of all diamond mining operations in the country.
In 1889, Rhodes negotiated a strategic agreement with the London-based Diamond Syndicate, which agreed to purchase a fixed quantity of diamonds at an agreed price, thereby regulating output and maintaining prices.
The agreement soon proved to be very successful – for example, during the trade slump of 1891–1892, supply was simply curtailed to maintain the price.
Rhodes was concerned about the break-up of the new monopoly, stating to shareholders in 1896 that the company's "only risk is the sudden discovery of new mines, which human nature will work recklessly to the detriment of us all".
The
Second Boer War
The Second Boer War ( af, Tweede Vryheidsoorlog, , 11 October 189931 May 1902), also known as the Boer War, the Anglo–Boer War, or the South African War, was a conflict fought between the British Empire and the two Boer Republics (the Sout ...
proved to be a challenging time for the company.
Kimberley was besieged as soon as war broke out, thereby threatening the company's valuable mines. Rhodes personally moved into the city at the onset of the siege in order to put political pressure on the British government to divert military resources towards relieving the siege rather than more strategic war objectives. Despite being at odds with the military,
Rhodes placed the full resources of the company at the disposal of the defenders, manufacturing
shells, defences, an
armoured train
An armoured train is a railway train protected with armour. Armoured trains usually include railway wagons armed with artillery, machine guns and autocannons. Some also had slits used to fire small arms from the inside of the train, a facili ...
and a gun named ''
Long Cecil
Long Cecil is a cannon built in the workshops of the De Beers mining company in Kimberley for use by the British in the Siege of Kimberley during the Second Boer War.
Construction
The defenders at Kimberley had only the relatively small RM ...
'' in the company workshops.
Oppenheimer control
In 1898, diamonds were discovered on farms near
Pretoria
Pretoria () is South Africa's administrative capital, serving as the seat of the Executive (government), executive branch of government, and as the host to all foreign embassies to South Africa.
Pretoria straddles the Apies River and extends ...
, Transvaal. One led to the discovery of the Premier Mine. The Premier Mine was registered in 1902 and the
Cullinan Diamond
The Cullinan Diamond is the largest gem-quality rough diamond ever found,Scarratt and Shor, p. 120. weighing (1 lb 5.92 oz), discovered at the Premier No.2 mine in Cullinan, South Africa, on 26 January 1905. It was named after Thomas Cull ...
, the largest rough diamond ever discovered, was found there in 1905. (The Premier Mine was renamed the Cullinan Mine in 2003). However, its
owner
Ownership is the state or fact of legal possession and control over property, which may be any asset, tangible or intangible. Ownership can involve multiple rights, collectively referred to as title, which may be separated and held by different ...
refused to join the
De Beers cartel.
Instead, the mine started selling to a pair of independent dealers named
Bernard
Bernard (''Bernhard'') is a French and West Germanic masculine given name. It is also a surname.
The name is attested from at least the 9th century. West Germanic ''Bernhard'' is composed from the two elements ''bern'' "bear" and ''hard'' "brav ...
and
Ernest Oppenheimer
Sir Ernest Oppenheimer (22 May 1880 – 25 November 1957), KStJ was a diamond and gold mining entrepreneur, financier and philanthropist, who controlled De Beers and founded the Anglo American Corporation of South Africa.
Career
Ernest Oppenhei ...
, thereby weakening the De Beers stronghold.
Francis Oats, who became Chairman of De Beers in 1908, was dismissive of the threats from the Premier Mine and the finds in
German South West Africa
German South West Africa (german: Deutsch-Südwestafrika) was a colony of the German Empire from 1884 until 1915, though Germany did not officially recognise its loss of this territory until the 1919 Treaty of Versailles. With a total area of ...
.
However, production soon equalled all of the De Beers mines combined. Ernest Oppenheimer was appointed the local agent for the powerful London Syndicate, rising to the position of mayor of Kimberley within 10 years. He understood the core principle that underpinned De Beers's success, stating in 1910 that "common sense tells us that the only way to increase the value of diamonds is to make them scarce, that is to reduce production".
During World War I, the Premier mine was finally absorbed into De Beers. When Rhodes died in 1902, De Beers controlled 90% of the world's diamond production. Ernest Oppenheimer took over the chairmanship of the company in 1929, after buying shares and being appointed to the board in 1926.
Oppenheimer was very concerned about the discovery of diamonds in 1908 in German
South West Africa
South West Africa ( af, Suidwes-Afrika; german: Südwestafrika; nl, Zuidwest-Afrika) was a territory under South African administration from 1915 to 1990, after which it became modern-day Namibia. It bordered Angola (Portuguese colony before 1 ...
, fearing that the increased supply would swamp the market and force prices down.
Former CIA chief Admiral
Stansfield Turner claimed that De Beers restricted US access to industrial diamonds needed for the country's war effort during World War II.
In May 1955, Ernest Oppenheimer opened the new headquarters which combined the operations of Anglo American and the De Beers group. After Ernest died in November 1957, operation of Anglo and De Beers were passed on to his son,
Harry Oppenheimer
Harry Frederick Oppenheimer (28 October 1908 – 19 August 2000) was a prominent South African businessman, industrialist and philanthropist. Oppenheimer was often ranked as one of the wealthiest people in the world, and was considered South A ...
. Under Harry, the company expanded to several different countries around the globe, including Canada, Australia, Malaysia, Portugal, Zambia, and Tanzania. In South Africa, Harry opposed
apartheid
Apartheid (, especially South African English: , ; , "aparthood") was a system of institutionalised racial segregation that existed in South Africa and South West Africa (now Namibia) from 1948 to the early 1990s. Apartheid was ...
, arguing that it hindered economic growth. Despite this, De Beers has been criticized for profiting from the system during the apartheid period.
By 1973, Anglo and De Beers accounted for 10 percent of South Africa's gross national product and 30 percent of the country's exports.
Throughout the 1960s and 1970s, De Beers attempted to secretly enter the United States' diamond market, being forced to divest its American assets in 1975 to avoid the risk of violating anti-trust laws. Harry Oppenheimer stepped down as the chairman and director of Anglo-American and De Beers in December 1982.
21st-century changes
![Vladimir Putin in South Africa 5-6 September 2006-16](https://upload.wikimedia.org/wikipedia/commons/3/3b/Vladimir_Putin_in_South_Africa_5-6_September_2006-16.jpg)
During the 20th century, De Beers used several methods to leverage its dominant position to influence the international diamond market.
First, it attempted to convince independent producers to join its single
channel
Channel, channels, channeling, etc., may refer to:
Geography
* Channel (geography), in physical geography, a landform consisting of the outline (banks) of the path of a narrow body of water.
Australia
* Channel Country, region of outback Austral ...
monopoly. When that did not work, it flooded the market with diamonds similar to those of producers who refused to join in, depressing their price and undermining return for the resistant. It also purchased and stockpiled diamonds produced by other manufacturers as well as surplus diamonds in order to control prices by limiting
supply
Supply may refer to:
*The amount of a resource that is available
**Supply (economics), the amount of a product which is available to customers
**Materiel, the goods and equipment for a military unit to fulfill its mission
*Supply, as in confidenc ...
.
Finally, it bought diamonds when prices fell considerably naturally, to constrict supply and drive their value back up, such as during the Great Depression.
In 2000, the De Beers business model changed
because of factors such as the decision by producers in Canada and Australia to distribute diamonds outside the De Beers channel,
as well as increasingly negative publicity surrounding
blood diamond
''Blood Diamond'' is a 2006 American political war action thriller film directed and co-produced by Edward Zwick and starring Leonardo DiCaprio, Jennifer Connelly, and Djimon Hounsou. The title refers to blood diamonds, which are diamonds min ...
s, which forced De Beers to protect its image by limiting sales to its own mined products.
The combination of a more fragmented and thus more competitive diamond market, increased transparency, and greater
liquidity
Liquidity is a concept in economics involving the convertibility of assets and obligations. It can include:
* Market liquidity, the ease with which an asset can be sold
* Accounting liquidity, the ability to meet cash obligations when due
* Liqui ...
, caused De Beers's market share of rough diamonds to fall from as high as 90% in the 1980s to 29.5% in 2019.
Seeing these developing trends, the Oppenheimer family announced in November 2011 its intention to sell its entire 40% stake in De Beers to
Anglo American plc
Anglo American plc is a British listed multinational mining company with headquarters in London, England. It is the world's largest producer of platinum, with around 40% of world output, as well as being a major producer of diamonds, copper, n ...
, thereby increasing Anglo American's ownership of the company to 85% (with the remaining 15% owned by the Government of the Republic of Botswana).
The transaction was worth £3.2 billion (US$5.1 billion) in cash and ended the Oppenheimer dynasty's 80-year ownership of De Beers.
Marketing
De Beers successfully advertised diamonds to manipulate consumer demand. One of the most effective marketing strategies has been the marketing of diamonds as a symbol of love and commitment.
A copywriter working for
N. W. Ayer & Son,
Frances Gerety (1916–1999), coined the famous advertising slogan, 'A Diamond is Forever', in 1947. In 2000, ''
Advertising Age
''Ad Age'' (known as ''Advertising Age'' until 2017) is a global media brand that publishes news, analysis, and data on marketing and media. Its namesake magazine was started as a broadsheet newspaper in Chicago in 1930. ''Ad Age'' appears in mul ...
'' magazine named 'A Diamond is Forever' the best advertising slogan of the 20th century. The slogan may have inspired the
James Bond
The ''James Bond'' series focuses on a fictional British Secret Service agent created in 1953 by writer Ian Fleming, who featured him in twelve novels and two short-story collections. Since Fleming's death in 1964, eight other authors have ...
book, film and song title
''Diamonds Are Forever''.
Other successful campaigns include the '
eternity ring
An eternity ring, also known as an infinity ring, is a woman's ring comprising a band of precious metal (usually gold) set with a continuous line of identically cut gemstones (usually diamonds) to symbolize never-ending love, usually given by a ...
' (meant as a symbol of continuing affection and appreciation),
the 'trilogy ring' (meant to represent the past, present, and future of a relationship) and the 'right hand ring' (meant to be bought and worn by women as a symbol of independence).
De Beers ran television advertisements featuring silhouettes of people wearing diamonds, set to the music of '
Palladio
Andrea Palladio ( ; ; 30 November 1508 – 19 August 1580) was an Italian Renaissance architect active in the Venetian Republic. Palladio, influenced by Roman and Greek architecture, primarily Vitruvius, is widely considered to be one of th ...
' by
Karl Jenkins
Sir Karl William Pamp Jenkins (born 17 February 1944) is a Welsh multi-instrumentalist and composer. His best known works include the song " Adiemus" and the ''Adiemus'' album series; '' Palladio''; ''The Armed Man''; and his ''Requiem''.
J ...
. The campaign, titled "Shadows and Lights" first ran in the first quarter of 1993. The song would later inspire a compilation album, ''
Diamond Music
Diamond is a Allotropes of carbon, solid form of the element carbon with its atoms arranged in a crystal structure called diamond cubic. Another solid form of carbon known as graphite is the Chemical stability, chemically stable form of car ...
'', released in 1996, which features the 'Palladio' suite. A 2010 commercial for
Verizon Wireless
Verizon is an American wireless network operator that previously operated as a separate division of Verizon Communications under the name Verizon Wireless. In a 2019 reorganization, Verizon moved the wireless products and services into the divi ...
parodied the De Beers spots.
In May 2018, De Beers introduced a new brand called "Lightbox" that are made with
synthetic diamonds. The synthetic stones start at $200 for a quarter carat to $800 for full carat diamond. The new lab-grown diamond retail for about one-tenth the cost of naturally occurring diamonds. The new brand began selling in September 2018 and are produced in
Gresham, Oregon
Gresham ( ) is a city located in Multnomah County, Oregon, in the United States of America, immediately east of Portland, Oregon. It is considered a suburb within the Greater Portland Metropolitan area. Though it began as a settlement in the mid- ...
, a $94 million facility using the region's cheap electricity, which opened in 2018 with the capacity for 500,000 rough carats of diamonds per year.
Operations
![Snap Lake Diamond Mine](https://upload.wikimedia.org/wikipedia/commons/c/cd/Snap_Lake_Diamond_Mine.jpg)
Mining in
Botswana
Botswana (, ), officially the Republic of Botswana ( tn, Lefatshe la Botswana, label=Setswana, ), is a landlocked country in Southern Africa. Botswana is topographically flat, with approximately 70 percent of its territory being the Kalahar ...
takes place through the mining company
Debswana
Debswana Diamond Company Limited, or simply Debswana, is a mining company located in Botswana, and is the world's leading producer of diamonds by value. Debswana operates four diamond mines in the eastern and central parts of Botswana, as well a ...
, a 50–50 joint venture with the Government of the Republic of Botswana. It operates four mines – Jwaneng, Orapa, Letlhakane and Damtshaa, though Damtshaa was put on care and maintenance in 2015.
In Namibia, mining is carried out through
Namdeb Holdings, a 50–50 joint venture with the Government of the Republic of Namibia. Namdeb Holdings is made up of Debmarine Namibia (covering offshore mining) and Namdeb Diamond Corporation (land-based coastal mining). For offshore mining, motor vessels are used, including the sixth and latest, the N$2.3 billion
SS Nujoma, the world's most advanced diamond exploration and sampling vessel, which began full operations in June 2017.
De Beers Consolidated Mines is responsible for the De Beers mining in
South Africa
South Africa, officially the Republic of South Africa (RSA), is the southernmost country in Africa. It is bounded to the south by of coastline that stretch along the South Atlantic and Indian Oceans; to the north by the neighbouring countri ...
. It is 74% owned by De Beers and 26% by a broad-based black economic empowerment partner, Ponahalo Investments. There are two mines – Venetia and Voorspoed.
In 2008, De Beers began production at the
Snap Lake mine in the
Northwest Territories
The Northwest Territories (abbreviated ''NT'' or ''NWT''; french: Territoires du Nord-Ouest, formerly ''North-Western Territory'' and ''North-West Territories'' and namely shortened as ''Northwest Territory'') is a federal territory of Canada. ...
, Canada; this was the first De Beers mine outside Africa and was Canada's first completely underground diamond mine. However, production was suspended when the mine was put on care and maintenance in 2015.
De Beers opened the
Victor mine
The Victor Mine was the first Canadian diamond mine located in Ontario, and De Beers' second diamond mine in Canada (after the Snap Lake Diamond Mine). It is located in the Northern Ontario Ring of Fire, in the James Bay Lowlands west of Att ...
in
Ontario
Ontario ( ; ) is one of the thirteen provinces and territories of Canada.Ontario is located in the geographic eastern half of Canada, but it has historically and politically been considered to be part of Central Canada. Located in Central Ca ...
, Canada, the same year, a day after Snap Lake. This was followed by the opening of the company's third mine in Canada,
Gahcho Kue, in September 2016.
Trading of rough diamonds takes place through two channels – De Beers Global Sightholder Sales (GSS) and De Beers Auction Sales. GSS sells about 90% of De Beers's rough diamonds, by value, and features wholly owned and joint venture operations in South Africa (De Beers Sightholder Sales South Africa), Botswana (DTCB), and Namibia (NDTC). They sort, value and sell 33% (2013) of the world's rough diamonds by value.
There are two main types of customer for rough diamonds –
Sightholder
A sightholder is a company on the De Beers Global Sightholder Sales's (DBGSS) list of authorized bulk purchasers of rough diamonds. De Beers Group made this list, the second largest miner of diamonds. DBGSS was previously known as DTC (Diamond T ...
s and Accredited Buyers. Sightholders have a term contract. Accredited Buyers (a customer type introduced in 2014–15) have a more ad hoc arrangement. De Beers also sells about 10% of its rough diamonds through online auction sales. The company pioneered the approach in 2008 when it broke with 44 years of direct sales to hold the diamond industry's first online international auction sale. It is now the world's leader in this kind of auction sale.
De Beers employs more than 30,000 people around the globe on five continents, with more than 17,000 employees in Africa. Almost 8,000 people are employed in Botswana, around 6,200 in South Africa, nearly 2,900 in Namibia, some 1,260 in Canada and about 320 in exploration.
In February 2020, De Beers reported its worst set of earnings since the company was bought by miner Anglo American in 2012.
Business structure and brands
On 4 November 2011, Anglo American plc and CHL Holdings announced their agreement for Anglo American to acquire an incremental interest in De Beers, increasing Anglo American's 45% shareholding in the world's leading diamond company to 85%. De Beers plc was originally incorporated as De Beers Société Anonyme in 2000 in Luxembourg. Following the closure of this office, the company was reclassified as De Beers plc in 2017, with its head office now in Jersey. It is made up of two shareholdings:
Anglo American plc
Anglo American plc is a British listed multinational mining company with headquarters in London, England. It is the world's largest producer of platinum, with around 40% of world output, as well as being a major producer of diamonds, copper, n ...
has an 85% shareholding and the Government of the Republic of Botswana owns 15% directly. De Beers plc is the holding company of The De Beers Group of Companies.
It is involved in many parts of the diamond value chain, from mining to sales, and is made up of a series of joint ventures and wholly owned operations.
The joint ventures are:
* Debmarine Namibia
* Debswana
* DTCB
* Namdeb
* NDTC
The wholly owned operations are in southern Africa and Canada. Also wholly owned are
Forevermark
Forevermark is a diamond company and subsidiary of De Beers Group.
Forevermark currently operates in China, Hong Kong, India, Japan, and the United States. Forevermark is present in 32 markets in total across Europe, Asia, Australia, and the Unit ...
, De Beers Jewellers, the International Institute of Diamond Valuation, De Beers Ventures, the International Institute of Diamond Grading & Research and Element Six (Umicore has a 40% stake in Element Six's abrasives division).
Forevermark
Forevermark
Forevermark is a diamond company and subsidiary of De Beers Group.
Forevermark currently operates in China, Hong Kong, India, Japan, and the United States. Forevermark is present in 32 markets in total across Europe, Asia, Australia, and the Unit ...
was launched in 2008 as one of the two diamond brands from The De Beers Group of Companies. According to the company website, "Each Forevermark diamond is inscribed with a promise: that it is beautiful, rare and responsibly sourced." Forevermark diamonds are inscribed with an icon and unique identification number, albeit invisibly to the naked eye: the Forevermark inscription is th of a
micron
The micrometre ( international spelling as used by the International Bureau of Weights and Measures; SI symbol: μm) or micrometer (American spelling), also commonly known as a micron, is a unit of length in the International System of Unit ...
deep. This inscription helps distinguish Forevermark diamonds from other natural diamonds though, similarly to when distinguishing natural diamonds from
synthetic diamond
Lab-grown diamond (LGD; also called laboratory-grown, laboratory-created, man-made, artisan-created, artificial, synthetic, or cultured diamond) is diamond that is produced in a controlled technological process (in contrast to naturally formed ...
s, it requires specialist detection equipment to view. The inscription also helps maintain scarcity: the Forevermark website boasts that only a tiny percentage of diamonds qualify for the Forevermark brand.
De Beers Jewellers
De Beers Diamond Jewellers (DBDJ) was established in 2001 as a 50:50 joint venture between The De Beers Group of Companies and
LVMH
LVMH Moët Hennessy Louis Vuitton (), commonly known as LVMH, is a French holding multinational corporation and conglomerate specializing in luxury goods, headquartered in Paris. The company was formed in 1987 through the merger of fashion house ...
, the French luxury goods company.
The first De Beers boutique opened in 2002 on London's Old Bond Street as the brand's flagship store. Since then, stores have opened in various cities around the world. In March 2017, The De Beers Group of Companies acquired LVMH's 50% shareholding in DBDJ and new name De Beers Jewellers was unveiled.
De Beers Ventures
De Beers Ventures was established by De Beers Group in June 2017 to consider minority stake investments in start-ups and growth companies that could be of benefit to De Beers Group or the broader diamond sector.
The International Institute of Diamond Grading & Research
The International Institute of Diamond Grading & Research (IIDGR) was set up by De Beers in 2008, with the aim of providing a range of services and equipment in the field of diamond verification. It is based in London, Antwerp and, from 2015, in
Surat
Surat is a city in the western Indian state of Gujarat. The word Surat literally means ''face'' in Gujarati and Hindi. Located on the banks of the river Tapti near its confluence with the Arabian Sea, it used to be a large seaport. It is now ...
,
India
India, officially the Republic of India (Hindi: ), is a country in South Asia. It is the seventh-largest country by area, the second-most populous country, and the most populous democracy in the world. Bounded by the Indian Ocean on the so ...
. The IIDGR works only on diamonds that meet the requirements of the United Nations' World Diamond Council
Kimberley Process.
Blood diamonds and the Kimberley Process
In 1999, a campaign by
Global Witness
Global Witness is an international NGO established in 1993 that works to break the links between natural resource exploitation, conflict, poverty, corruption, and human rights abuses worldwide. The organisation has offices in London and Washin ...
to highlight the role of diamonds in international conflicts led to a review by the United Nations. The initial focus of the UN's investigation was on
Jonas Savimbi
Jonas Malheiro Savimbi (; 3 August 1934 – 22 February 2002) was an Angolan revolutionary politician and rebel military leader who founded and led the National Union for the Total Independence of Angola (UNITA). UNITA waged a guerrilla war agai ...
's
UNITA
The National Union for the Total Independence of Angola ( pt, União Nacional para a Independência Total de Angola, abbr. UNITA) is the second-largest political party in Angola. Founded in 1966, UNITA fought alongside the Popular Movement for ...
movement in Angola, which was found to have bartered uncut diamonds for weaponry despite international economic and diplomatic sanctions being in effect through
United Nations Security Council Resolution 1173
United Nations Security Council resolution 1173, adopted unanimously on 12 June 1998, after reaffirming United Nations Security Council Resolution 696, Resolution 696 (1991) and all subsequent resolutions on Angola, particularly United Nations Se ...
.
In 1999, De Beers Group stopped all outside buying of diamonds in order to guarantee the
conflict-free status of their diamonds effective from 26 March 2000.
[De Beers Group ]
De Beers Report to Stakeholders 2005/6 – Ethics, "Conflict and Instability"
'' De Beers Group. Retrieved 11 February 2007.
In December 2000, following the recommendations of the
Fowler Report
The Fowler Report, released on March 14, 2000, is a United Nations report detailing how various companies, African and European governments, including that of Angola and the political wing of UNITA, violated the Lusaka Protocol as well as UN-impos ...
, the UN adopted the landmark General Assembly Resolution A/RES/55/56 supporting the creation of an international
certification
Certification is the provision by an independent body of written assurance (a certificate) that the product, service or system in question meets specific requirements. It is the formal attestation or confirmation of certain characteristics of a ...
scheme for rough diamonds. By November 2002, negotiations between governments, the international diamond industry, led by De Beers, and civil society organisations resulted in the creation of the
Kimberley Process Certification Scheme
The Kimberley Process Certification Scheme (KPCS) is the process established in 2003 to prevent " conflict diamonds" from entering the mainstream rough diamond market by United Nations General Assembly Resolution 55/56 following recommendations in ...
(KPCS), which sets out the requirements for controlling rough diamond production and trade and became effective in 2003.
De Beers states that 100% of the diamonds it now sells are conflict-free and that all De Beers diamonds are purchased in compliance with national law, the Kimberley Process Certification Scheme and its own Diamond Best Practice Principles.
[Best Practice Principles – The De Beers Group](_blank)
The Kimberley process has helped restore the reputation of the industry, as well as eliminating sources of excess supply.
In 2018, De Beers used blockchain technology to successfully track 100 high-value diamonds.
The diamonds were tracked through the manufacturing process from the mine to the retailer in order to ensure their quality and conflict-free status.
In 2019, they launched their own end-to-end traceability platform called Tracr to enable all diamonds to be identified and traced as they move from the mine to the store.
Signet and the Russian-based
Alrosa are using the technology.
Corporate affairs
![17 Charterhouse Street 2](https://upload.wikimedia.org/wikipedia/commons/6/66/17_Charterhouse_Street_2.jpg)
In August 2017, De Beers partnered with the
Stanford Graduate School of Business
The Stanford Graduate School of Business (also known as Stanford GSB) is the graduate business school of Stanford University, a private research university in Stanford, California. For several years it has been the most selective business schoo ...
to accelerate business ventures to market in Botswana, Namibia, and South Africa. As part of two programs, the partnership is set to help teach early entrepreneurs how to commercialize their business ideas. The partnership is a three-year, $3 million deal.
In September 2017, De Beers partnered with
UN Women
The United Nations Entity for Gender Equality and the Empowerment of Women, also known as UN Women, is a United Nations entity working for gender equality and the empowerment of women. UN Women advocates for the rights of women and girls, and focu ...
to help the advancement of women within the company and the countries it operates in. In 2018, the two entities launched a program to support 500 women micro-entrepreneurs in
Blouberg and
Musina
Musina (; formerly Messina) is the northernmost town in the Limpopo province of South Africa. It is located near the confluence of the Limpopo River with the Sand River and the border to Zimbabwe. It has a population of between 20,000 and 40, ...
communities, near De Beers's
Venetia diamond mine.
In May 2018, De Beers's group company
Element Six
Element Six is a company specialised in providing synthetic diamond, cubic boron nitride and other superhard materials for industrial use.Part of the De Beers Group, Element Six employs over 1,900 people and its primary manufacturing sites are ...
launched a lab-grown diamond brand to sell jewelry directly to consumers.
Former operations
International Institute of Diamond Valuation
The International Institute of Diamond Valuation (IIDV) was launched by De Beers Group in March 2016. Operating in partnership with diamond jewellery retailers, it provided a reselling service for all diamonds, regardless of value. In April 2019, De Beers closed its IIDV division.
Legal issues
Sherman Antitrust Act
During World War II, Ernest Oppenheimer attempted to negotiate a way around the
Sherman Antitrust Act
The Sherman Antitrust Act of 1890 (, ) is a United States antitrust law which prescribes the rule of free competition among those engaged in commerce. It was passed by Congress and is named for Senator John Sherman, its principal author.
Th ...
by proposing that De Beers register a US branch of the
Diamond Syndicate Incorporated. In this way, his company could provide the US with the industrial diamonds it desperately sought for the war effort in return for immunity from prosecution after the war; however his proposal was rejected by the US Justice Department when it was discovered that De Beers had no intention of stockpiling any industrial diamonds in the US.
In 1945, the Justice Department finally filed an antitrust case against De Beers, but the case was dismissed as the company had no presence on US soil.
Relocation of indigenous San people in Botswana
In Botswana, a long dispute has existed between the interests of the mining company, De Beers, and the
San (Bushman) tribe. The San have been facing threats of forcible
relocation since 1980s, when the diamond resources were discovered.
A campaign was fought in an attempt to bring an end to what the indigenous rights organisation,
Survival International
Survival International is a human rights organisation formed in 1969, a London based charity that campaigns for the rights of indigenous and/or tribal peoples and uncontacted peoples.
The organisation's campaigns generally focus on tribal peopl ...
, considers to be a
genocide
Genocide is the intentional destruction of a people—usually defined as an ethnic, national, racial, or religious group—in whole or in part. Raphael Lemkin coined the term in 1944, combining the Greek word (, "race, people") with the Latin ...
of a tribe that has been living in those lands for tens of thousands of years. Several international fashion models, including
Iman,
and
Erin O'Connor
Erin O'Connor, MBE (born 9 February 1978) is a British fashion model.
Early life
O'Connor was born and brought up in Brownhills, West Midlands, where she attended Brownhills Community School. She was brought up Catholic and her father is fro ...
, who were previously involved with advertising for the companies' diamonds, supported the campaign. De Beers sold its mine in Botswana to
Gem Diamonds in 2007.
Industrial diamonds
In 2004, De Beers pled guilty and paid a US$10 million fine to the
United States Department of Justice
The United States Department of Justice (DOJ), also known as the Justice Department, is a federal executive department of the United States government tasked with the enforcement of federal law and administration of justice in the United State ...
to settle a 1994 charge that De Beers had colluded with
General Electric
General Electric Company (GE) is an American multinational conglomerate founded in 1892, and incorporated in New York state and headquartered in Boston. The company operated in sectors including healthcare, aviation, power, renewable energ ...
to fix the price of
industrial diamonds. In 2008, De Beers agreed to pay US$295 million class-action settlement after accusations of price fixing. The company appealed the decision but ended up paying the settlement in 2013.
European Commission
In February 2006, De Beers entered into legally binding commitments with the
European Commission
The European Commission (EC) is the executive of the European Union (EU). It operates as a cabinet government, with 27 members of the Commission (informally known as "Commissioners") headed by a President. It includes an administrative body o ...
to cease purchasing rough diamonds from Russian mining company
Alrosa as of the end of 2008 in order to ensure competition between the two companies.
South Africa's rough diamond trade
In 2014, the
Leverhulme Centre for the Study of Value, based at the
University of Manchester
, mottoeng = Knowledge, Wisdom, Humanity
, established = 2004 – University of Manchester Predecessor institutions: 1956 – UMIST (as university college; university 1994) 1904 – Victoria University of Manchester 1880 – Victoria Univer ...
, published a report authored by
Sarah Bracking and
Khadija Sharife, identifying over US$3.3 billion in price fixing within the South African rough diamond trade from 2004 to 2012, leading to an estimated deficit in tax paid of ZAR 1 billion per year. The report found significant evidence of profit shifting through volume and value manipulation. Sharife simultaneously published an article
[Khadija Sharife, 100 Reporters http://100r.org/2014/05/rough-and-polished/] disclosing the political system that cultivated revenue leakage, including the donation of De Beers staff to the State Diamond Trader (SDT). The report, like the article, utilised aggregated data produced by the Kimberley Process (KP) certificates of import-exports, relying on figures listed by the diamond companies themselves, in which De Beers was the dominant player. The South African Department of Mineral Resources (DMR) disclosed that De Beers did not authorise them to publish figures involving values, sales, pricing and other data, preventing transparency of the industry.
See also
*
Blood diamond
''Blood Diamond'' is a 2006 American political war action thriller film directed and co-produced by Edward Zwick and starring Leonardo DiCaprio, Jennifer Connelly, and Djimon Hounsou. The title refers to blood diamonds, which are diamonds min ...
*
Canadian diamonds
*
De Beers Diamond Oval
The De Beers Diamond Oval is a cricket stadium in Kimberley, Northern Cape, South Africa. It opened in 1973 and has a capacity of 11,000. It is currently used mostly for cricket matches and is the home venue of both the VKB Knights, in the Su ...
*
Julian Ogilvie Thompson
Julian Ogilvie Thompson (born 1934 in Cape Town, South Africa) is a South African businessman and former chairman of De Beers and the Anglo American mining company.
Early life
Julian Ogilvie Thompson was born in 1934 in Cape Town, South Africa ...
*
List of diamonds
Diamond (gemstone), Diamonds become famous typically for some combination of their size, color and quality. Diamonds occur naturally in many different colors, so the largest diamond of a particular color may not be large in absolute terms, but it ...
*
List of synthetic diamond manufacturers
*
''Peace in Africa'' (ship), diamond mining dredge
*
Synthetic diamond
Lab-grown diamond (LGD; also called laboratory-grown, laboratory-created, man-made, artisan-created, artificial, synthetic, or cultured diamond) is diamond that is produced in a controlled technological process (in contrast to naturally formed ...
* ''
The Case of the Disappearing Diamonds'' (TV documentary)
Notes
References
*
*
*Rotberg, Robert I., and Miles F. Shore. ''The Founder: Cecil Rhodes and the Pursuit of Power''. Oxford: Oxford University Press, 1988.
External links
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