De Beers
Encyclopedia
De Beers is a family of companies that dominate the diamond
, diamond mining, diamond trading and industrial diamond manufacturing sectors. De Beers is active in every category of industrial diamond mining: open-pit, underground, large-scale alluvial, coastal and deep sea. Mining takes place in Botswana, Namibia, South Africa and Canada.
The company was founded by Cecil Rhodes, who was financed by Alfred Beit
and N M Rothschild & Sons
. In 1927, Ernest Oppenheimer
, a German Jewish immigrant who had earlier founded mining giant Anglo American PLC with American financier J.P. Morgan, managed to wrest control of the empire, building and consolidating the company's global monopoly over the world's diamond industry until his retirement. During this time, he was involved in a number of controversies, including price fixing, antitrust
behaviour and an allegation of not releasing industrial diamonds for the US war effort during World War II
.
Cecil Rhodes, the founder of De Beers, got his start by renting water pumps to miners during the diamond rush that started in 1871, when an 83.5 carat diamond was found on Colesburg Kopje
(present day Kimberley
), South Africa. He invested the profits of this operation into buying up claims of small mining operators, with his operations soon expanding into a separate mining company. He soon secured funding from the Rothschild family
, 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 breakup of the new monopoly, stating to shareholders in 1896 that:
The Second Boer War
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
and a gun named Long Cecil
in the company workshops.
In 1902, a competitive mine named the Cullinan Mine
was discovered; however its owner refused to join the De Beers cartel. Instead, the mine started selling to a pair of independent dealers named Bernard and Ernest Oppenheimer
, thereby weakening the De Beers cartel. Production soon equalled all of the De Beers mines combined, as well as yielding the largest rough diamond ever discovered, the Cullinan Diamond
. 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 success, stating in 1910 that: During World War I
, the Cullinan 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 1927, after buying a seat on the board a year earlier.
Oppenheimer was very concerned about the discovery of diamonds in 1908 in German South West Africa
, 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
.
practices throughout the 20th century, whereby it used its dominant position to manipulate the international diamond market. The company used several methods to exercise this control over the market: Firstly, it convinced independent producers to join its single channel
monopoly, it flooded the market with diamonds similar to those of producers who refused to join the cartel
, and lastly, it purchased and stockpiled diamonds produced by other manufacturers in order to control prices through supply
.
In 2000, the De Beers model changed, due to factors such as the decision by producers in Russia, Canada and Australia, to distribute diamonds outside of the De Beers channel, thus effectively ending the monopoly. Current major players in the diamond industry are the African producers Debswana and Namdeb, De Beers, Rio Tinto
, BHP Billiton
, Lev Leviev
, Harry Winston, and Alrosa
.
In November 2011 the Oppenheimer family sold the entirety of their 40% stake in De Beers to Anglo American thereby increasing Anglo American's ownership of the company to 85%.
The transaction was $5.1 billion in cash and ending the Oppenheimers' De Beers Dynasty's 80-year ownership in the world's largest diamond miner.
, a 50-50 joint venture with the Government of the Republic of Botswana. In Namibia it takes place through Namdeb, a 50-50 joint venture with the Government of the Republic of Namibia. Mining in South Africa takes place through De Beers Consolidated Mines (DBCM), 74% owned by DeBeers and 26% by a broad based black economic empowerment partner, Ponahalo Investments. In 2007 De Beers began production at the Snap Lake Mine
in Northwest Territories
, Canada; this is the first De Beers mine outside of Africa. In July 2008 De Beers opened the Victor Mine in Ontario
, Canada.
Trading of rough diamonds takes place through the Diamond Trading Company
via wholly owned and joint venture operations in South Africa (DTCSA), Botswana (DTCB), Namibia (NDTC) and the United Kingdom (DTC). The various DTCs sort, value and sell approximately 40% of the world's rough diamonds by value.
The Family of Companies employs about 20,000 people around the world on five continents, with 17,000 employees in Africa. Over 7000 people are employed in Botswana, over 7100 in South Africa, 3800 in Namibia, 700 in Canada and over 800 in Group Exploration.
, the rough diamond sales and distribution arm of the De Beers Group, sorts, values and sells approximately 40% of the world's rough diamonds by value. Currently the DTC has a combination of wholly owned and joint venture operations in South Africa (DTCSA), Botswana (DTCB), Namibia (NDTC) and the United Kingdom (DTC).
Diamonds sold by the DTC are sourced primarily from De Beers' own mining operations in South Africa and Canada, and through its joint venture partnerships with the governments of Botswana, and Namibia.
Technicians in London, Kimberley, Windhoek
and Gaborone
sort these diamonds into approximately 12,000 different categories based on size, shape, quality and colour, for DTC Sightholders. There are 79 Sightholder companies who buy the rough diamonds from the DTC and its partner offices. Sightholders travel to London, Kimberley, Gaborone and Windhoek ten times a year for their Sight. DTC Sales in 2007 were $5.9bn.
The Diamond Trading Company
develops diamond technology and operates a research and development facility based in the United Kingdom, to support the consistency of DTC rough diamond assortments for Sightholders and downstream industries in the DTC's producer partner countries.
Sightholders are required to comply with the De Beers's Best Practice Principles, which set out various objective standards of conduct within three main areas: business, social, and environmental responsibilities. The Best Practice Principles ensure that the De Beers Family of Companies, Sightholders and applicable third parties operate to an ethical, legal, professional, social and environmental standard, including being committed to the Kimberley Process.
The joint venture, called De Beers Diamond Jewellers Ltd sells diamond jewellery. The first De Beers boutique opened in 2002 on London's Old Bond Street as the brand's flagship store. A year later, the brand expanded to Asia with the opening of their first Tokyo stores. The brand expanded into the United States with a store on 5th Avenue in New York and Rodeo Drive in Beverly Hills in 2005. De Beers further expanded in the United States in 2007 with stores in Las Vegas, Houston, Dallas, and McLean, VA, coinciding with the launch of a website with e-commerce capability. There are now De Beers retail stores in England, France, Ukraine, Russia, Japan, Taipei
, Hong Kong, Macau
, Dubai
and the United States.
A young copywriter working for N. W. Ayer & Son, Frances Gerety, coined the famous advertising line "A Diamond is Forever" in 1947. In 2000, Advertising Age
magazine named "A Diamond Is Forever" the best advertising slogan of the twentieth century.
Other successful campaigns include the "eternity ring
" (as a symbol of continuing affection and appreciation), the "trilogy" ring (representing the past, present and future of a relationship) and the "right hand ring" (bought and worn by women as a symbol of independence).
De Beers is also known for its television advertisements featuring silhouettes of people wearing diamonds, to the music of Palladio by Karl Jenkins
. A 2010 commercial for Verizon Wireless
parodied the De Beers spots.
." Forevermark diamonds have an icon and identification number inscribed on the table facet of the diamond. The inscription is about 0.05 µm deep and applied using an undisclosed De Beers technology developed in Maidenhead
, United Kingdom, and Antwerp, Belgium.
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.
to fix the price of industrial diamonds.
to cease purchasing rough diamonds from Alrosa
as of the end of 2008. In January 2007, the European Commission
announced it had rejected all outstanding complaints against the Diamond Trading Company
's Supplier of Choice sales strategy.
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
's UNITA
movement in Angola, which was found to have bartered uncut diamonds for weaponry, thereby allowing the civil war
to continue in 1998 despite international economic and diplomatic sanctions being in effect through United Nations Security Council Resolution 1173
.
In 1999, De Beers decided to stop all outside buying of diamonds in order to guarantee categorically the conflict-free status of De Beers diamond, effective from 26 March 2000.
In December 2000, following the recommendations of the Fowler Report
, the UN adopted the landmark General Assembly Resolution A/RES/55/56 supporting the creation of an international certification
scheme for rough diamond
s. By November 2002, negotiations between governments, the international diamond industry and civil society organizations resulted in the creation of the Kimberley Process Certification Scheme (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. The Kimberley process has helped restore the reputation of the industry, as well as eliminating sources of excess supply.
s of the mining company, De Beers, and the relocation
of the Bushman
tribe from the land, in order to exploit diamond resources. The Bushmen have been facing threats from government policies since at least 1980, when the diamond resources were discovered. A campaign is being fought in an attempt to bring an end to what the indigenous rights organization, Survival International
considers it to be a genocide
of a tribe that has been living in those lands for tens of thousands of years. On the grounds that their hunting and gathering has become obsolete and their presence is no longer compatible with preserving wildlife resources, they were persecuted by the government in order to make them leave the reserve
. To get rid of them, they have had their water supplies cut off, they have been taxed, fined, beaten, and tortured as per land clearing requests by De Beers. Several international fashion models, including Iman
, Lily Cole
and Erin O'Connor
, who were previously involved with advertising for the companies' diamonds, have backed down after realizing the consequences raised by this scandal
, and now support the campaign.
Diamond (gemstone)
A diamond is one of the best-known and most sought-after gemstones...
, diamond mining, diamond trading and industrial diamond manufacturing sectors. De Beers is active in every category of industrial diamond mining: open-pit, underground, large-scale alluvial, coastal and deep sea. Mining takes place in Botswana, Namibia, South Africa and Canada.
The company was founded by Cecil Rhodes, who was financed by Alfred Beit
Alfred Beit
Alfred Beit was a German, British South African, Jewish gold and diamond magnate, a supporter of British imperialism in Southern Africa and a major donor towards infrastructure development in central and Southern Africa, and to university education and research in several countries.- Life and...
and N M Rothschild & Sons
N M Rothschild & Sons
N M Rothschild & Sons is a private investment banking company, belonging to the Rothschild family...
. In 1927, Ernest Oppenheimer
Ernest Oppenheimer
Sir Ernest Oppenheimer was a diamond and gold mining entrepreneur, financier and philanthropist, who controlled De Beers and founded the Anglo American Corporation of South Africa.-Career:...
, a German Jewish immigrant who had earlier founded mining giant Anglo American PLC with American financier J.P. Morgan, managed to wrest control of the empire, building and consolidating the company's global monopoly over the world's diamond industry until his retirement. During this time, he was involved in a number of controversies, including price fixing, antitrust
Antitrust
The United States antitrust law is a body of laws that prohibits anti-competitive behavior and unfair business practices. Antitrust laws are intended to encourage competition in the marketplace. These competition laws make illegal certain practices deemed to hurt businesses or consumers or both,...
behaviour and an allegation of not releasing industrial diamonds for the US war effort during World War II
World War II
World War II, or the Second World War , was a global conflict lasting from 1939 to 1945, involving most of the world's nations—including all of the great powers—eventually forming two opposing military alliances: the Allies and the Axis...
.
Company history
Big Hole
The Big Hole, Open Mine or Kimberley Mine is an open-pit and underground mine in Kimberley, South Africa, and claimed to be the largest hole excavated by hand.-History:...
(present day Kimberley
Kimberley, Northern Cape
Kimberley is a city in South Africa, and the capital of the Northern Cape. It is located near the confluence of the Vaal and Orange Rivers. The town has considerable historical significance due its diamond mining past and siege during the Second Boer War...
), South Africa. He invested the profits of this operation into buying up claims of small mining operators, with his operations soon expanding into a separate mining company. He soon secured funding from the Rothschild family
Rothschild family
The Rothschild family , known as The House of Rothschild, or more simply as the Rothschilds, is a Jewish-German family that established European banking and finance houses starting in the late 18th century...
, who would finance his business expansion. De Beers Consolidated Mines was formed in 1888 by the merger of the companies of Barney Barnato
Barney Barnato
Barney Barnato , born Barnet Isaacs, was a British Randlord, one of the entrepreneurs who gained control of diamond mining, and later gold mining, in South Africa from the 1870s.-Background:...
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 breakup of the new monopoly, stating to shareholders in 1896 that:
The Second Boer War
Second Boer War
The Second Boer War was fought from 11 October 1899 until 31 May 1902 between the British Empire and the Afrikaans-speaking Dutch settlers of two independent Boer republics, the South African Republic and the Orange Free State...
proved to be a challenging time for the company. Kimberley was besieged
Siege of Kimberley
The Siege of Kimberley took place during the Second Boer War at Kimberley, Cape Colony , when Boer forces from the Orange Free State and the Transvaal besieged the diamond mining town. The Boers moved quickly to try to capture the British enclave when war broke out between the British and the two...
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
Shell (projectile)
A shell is a payload-carrying projectile, which, as opposed to shot, contains an explosive or other filling, though modern usage sometimes includes large solid projectiles properly termed shot . Solid shot may contain a pyrotechnic compound if a tracer or spotting charge is used...
, defences, an armoured train
Armoured train
An armoured train is a train protected with armour. They are usually equipped with railroad cars armed with artillery and machine guns. They were mostly used during the late 19th and early 20th century, when they offered an innovative way to quickly move large amounts of firepower...
and a gun named Long Cecil
Long Cecil
Long Cecil was a unique one-off gun, designed by George Labram, a United States citizen, and built in the workshops of the De Beers mining company in Kimberley for use by the British during the Siege of Kimberley in the Second Boer War....
in the company workshops.
In 1902, a competitive mine named the Cullinan Mine
Premier Mine
The Premier Mine is an underground diamond mine owned by Petra Diamonds. It is situated in the town of Cullinan, 40 kilometres east of Pretoria, Gauteng Province, South Africa. Established in 1902, it was renamed the Cullinan Diamond Mine in November 2003 in celebration of its centenary...
was discovered; however its owner refused to join the De Beers cartel. Instead, the mine started selling to a pair of independent dealers named Bernard and Ernest Oppenheimer
Ernest Oppenheimer
Sir Ernest Oppenheimer was a diamond and gold mining entrepreneur, financier and philanthropist, who controlled De Beers and founded the Anglo American Corporation of South Africa.-Career:...
, thereby weakening the De Beers cartel. Production soon equalled all of the De Beers mines combined, as well as yielding the largest rough diamond ever discovered, the Cullinan Diamond
Cullinan Diamond
The Cullinan diamond is the largest rough gem-quality diamond ever found, at .The largest polished gem from the stone is named Cullinan I or the Great Star of Africa, and at was the largest polished diamond in the world until the 1985 discovery of the Golden Jubilee Diamond, , also from the...
. 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 success, stating in 1910 that: During World War I
World War I
World War I , which was predominantly called the World War or the Great War from its occurrence until 1939, and the First World War or World War I thereafter, was a major war centred in Europe that began on 28 July 1914 and lasted until 11 November 1918...
, the Cullinan 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 1927, after buying a seat on the board a year earlier.
Oppenheimer was very concerned about the discovery of diamonds in 1908 in German South West Africa
South West Africa
South-West Africa was the name that was used for the modern day Republic of Namibia during the earlier eras when the territory was controlled by the German Empire and later by South Africa....
, fearing that the increased supply would swamp the market and force prices down.
Former CIA chief, Admiral Stansfield Turner
Stansfield Turner
Stansfield M. Turner is a retired Admiral and former Director of Central Intelligence. He is currently a senior research scholar at the University of Maryland, College Park School of Public Policy....
, claimed that De Beers restricted US access to industrial diamonds needed for the country's war effort during World War II
World War II
World War II, or the Second World War , was a global conflict lasting from 1939 to 1945, involving most of the world's nations—including all of the great powers—eventually forming two opposing military alliances: the Allies and the Axis...
.
Diamond monopoly
De Beers is well known for its monopolisticMonopoly
A monopoly exists when a specific person or enterprise is the only supplier of a particular commodity...
practices throughout the 20th century, whereby it used its dominant position to manipulate the international diamond market. The company used several methods to exercise this control over the market: Firstly, it convinced independent producers to join its single channel
Distribution (business)
Product distribution is one of the four elements of the marketing mix. An organization or set of organizations involved in the process of making a product or service available for use or consumption by a consumer or business user.The other three parts of the marketing mix are product, pricing,...
monopoly, it flooded the market with diamonds similar to those of producers who refused to join the cartel
Cartel
A cartel is a formal agreement among competing firms. It is a formal organization of producers and manufacturers that agree to fix prices, marketing, and production. Cartels usually occur in an oligopolistic industry, where there is a small number of sellers and usually involve homogeneous products...
, and lastly, it purchased and stockpiled diamonds produced by other manufacturers in order to control prices through supply
Supply and demand
Supply and demand is an economic model of price determination in a market. It concludes that in a competitive market, the unit price for a particular good will vary until it settles at a point where the quantity demanded by consumers will equal the quantity supplied by producers , resulting in an...
.
In 2000, the De Beers model changed, due to factors such as the decision by producers in Russia, Canada and Australia, to distribute diamonds outside of the De Beers channel, thus effectively ending the monopoly. Current major players in the diamond industry are the African producers Debswana and Namdeb, De Beers, Rio Tinto
Rio Tinto Group
The Rio Tinto Group is a diversified, British-Australian, multinational mining and resources group with headquarters in London and Melbourne. The company was founded in 1873, when a multinational consortium of investors purchased a mine complex on the Rio Tinto river, in Huelva, Spain from the...
, BHP Billiton
BHP Billiton
BHP Billiton is a global mining, oil and gas company headquartered in Melbourne, Australia and with a major management office in London, United Kingdom...
, Lev Leviev
Lev Leviev
Lev Avnerovich Leviev is a Bukharian-Israeli billionaire businessman, with a net worth of roughly $1.5 billion following the 2008 global financial crisis. Leviev is one of the most prominent Mizrahi Jewish individuals in the world and has been a major philanthropist for Jewish causes in Eastern...
, Harry Winston, and Alrosa
Alrosa
ZAO ALROSA , is Russia's largest diamond company. Alrosa is engaged in the exploration, mining, manufacture and sale of diamonds. The company's operations are located primarily in the Sakha Republic/Yakutsk region. Alrosa accounts for approximately 25% of the world's rough diamond supply and 97%...
.
In November 2011 the Oppenheimer family sold the entirety of their 40% stake in De Beers to Anglo American thereby increasing Anglo American's ownership of the company to 85%.
The transaction was $5.1 billion in cash and ending the Oppenheimers' De Beers Dynasty's 80-year ownership in the world's largest diamond miner.
Activities
Mining in Botswana takes place through the mining company DebswanaDebswana
Debswana Diamond Company Ltd, or simply Debswana, is a giant mining company located in Botswana, and is the world's leading producer of diamonds by value. Debswana is a joint venture between the government of Botswana and the South African diamond company De Beers; each party owns 50 percent of...
, a 50-50 joint venture with the Government of the Republic of Botswana. In Namibia it takes place through Namdeb, a 50-50 joint venture with the Government of the Republic of Namibia. Mining in South Africa takes place through De Beers Consolidated Mines (DBCM), 74% owned by DeBeers and 26% by a broad based black economic empowerment partner, Ponahalo Investments. In 2007 De Beers began production at the Snap Lake Mine
Snap Lake Diamond Mine
The Snap Lake Diamond Mine is located about northeast of Yellowknife, Northwest Territories, and, according to De Beers, was their first mine outside Africa and Canada's first completely underground diamond mine....
in Northwest Territories
Northwest Territories
The Northwest Territories is a federal territory of Canada.Located in northern Canada, the territory borders Canada's two other territories, Yukon to the west and Nunavut to the east, and three provinces: British Columbia to the southwest, and Alberta and Saskatchewan to the south...
, Canada; this is the first De Beers mine outside of Africa. In July 2008 De Beers opened the Victor Mine in Ontario
Ontario
Ontario is a province of Canada, located in east-central Canada. It is Canada's most populous province and second largest in total area. It is home to the nation's most populous city, Toronto, and the nation's capital, Ottawa....
, Canada.
Trading of rough diamonds takes place through the Diamond Trading Company
Diamond Trading Company
The Diamond Trading Company is the rough diamond sales and distribution arm of the De Beers Family of Companies. The DTC sorts, values and sells approximately 75% of the world’s rough diamonds by value...
via wholly owned and joint venture operations in South Africa (DTCSA), Botswana (DTCB), Namibia (NDTC) and the United Kingdom (DTC). The various DTCs sort, value and sell approximately 40% of the world's rough diamonds by value.
The Family of Companies employs about 20,000 people around the world on five continents, with 17,000 employees in Africa. Over 7000 people are employed in Botswana, over 7100 in South Africa, 3800 in Namibia, 700 in Canada and over 800 in Group Exploration.
Business structure
On November 4, 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 current 45% shareholding in the world's leading diamond company to up to 85%. De Beers Investments is the privately held, ownership company of De Beers Société Anonyme (DBSA), and is registered in Luxembourg. It is made up of two shareholdings: Anglo American plc has a 85% shareholding and the Government of the Republic of Botswana owns 15% directly. De Beers Societe Anonyme (DBSA) is the management company of the De Beers group.The Family of Companies
The De Beers Family of Companies is involved in most parts of the diamond value chain. Companies are as follows:- De Beers Canada – mining
- De Beers Consolidated Mines – mining
- De Beers Diamond Jewellers – retail
- DebswanaDebswanaDebswana Diamond Company Ltd, or simply Debswana, is a giant mining company located in Botswana, and is the world's leading producer of diamonds by value. Debswana is a joint venture between the government of Botswana and the South African diamond company De Beers; each party owns 50 percent of...
– mining - Diamdel – trading
- Diamond Trading CompanyDiamond Trading CompanyThe Diamond Trading Company is the rough diamond sales and distribution arm of the De Beers Family of Companies. The DTC sorts, values and sells approximately 75% of the world’s rough diamonds by value...
– trading - Diamond Trading Company Botswana – trading
- Diamond Trading Company South Africa – trading
- Element SixElement SixElement Six is a company specialised in providing synthetic diamond, cubic boron nitride and other superhard materials for industrial use. It was created in 1946 and is owned by Umicore and De Beers...
– Advanced Materials / industrial diamonds - Forevermark – retail
- Namdeb – mining
- Namibia Diamond Trading Company – trading
The Diamond Trading Company
The Diamond Trading CompanyDiamond Trading Company
The Diamond Trading Company is the rough diamond sales and distribution arm of the De Beers Family of Companies. The DTC sorts, values and sells approximately 75% of the world’s rough diamonds by value...
, the rough diamond sales and distribution arm of the De Beers Group, sorts, values and sells approximately 40% of the world's rough diamonds by value. Currently the DTC has a combination of wholly owned and joint venture operations in South Africa (DTCSA), Botswana (DTCB), Namibia (NDTC) and the United Kingdom (DTC).
Diamonds sold by the DTC are sourced primarily from De Beers' own mining operations in South Africa and Canada, and through its joint venture partnerships with the governments of Botswana, and Namibia.
Technicians in London, Kimberley, Windhoek
Windhoek
Windhoek is the capital and largest city of the Republic of Namibia. It is located in central Namibia in the Khomas Highland plateau area, at around above sea level. The 2001 census determined Windhoek's population was 233,529...
and Gaborone
Gaborone
' is the capital and largest city of Botswana with a population of 191,776 based on a 2006 survey, about 10% of the total population of Botswana....
sort these diamonds into approximately 12,000 different categories based on size, shape, quality and colour, for DTC Sightholders. There are 79 Sightholder companies who buy the rough diamonds from the DTC and its partner offices. Sightholders travel to London, Kimberley, Gaborone and Windhoek ten times a year for their Sight. DTC Sales in 2007 were $5.9bn.
The Diamond Trading Company
Diamond Trading Company
The Diamond Trading Company is the rough diamond sales and distribution arm of the De Beers Family of Companies. The DTC sorts, values and sells approximately 75% of the world’s rough diamonds by value...
develops diamond technology and operates a research and development facility based in the United Kingdom, to support the consistency of DTC rough diamond assortments for Sightholders and downstream industries in the DTC's producer partner countries.
Sightholders are required to comply with the De Beers's Best Practice Principles, which set out various objective standards of conduct within three main areas: business, social, and environmental responsibilities. The Best Practice Principles ensure that the De Beers Family of Companies, Sightholders and applicable third parties operate to an ethical, legal, professional, social and environmental standard, including being committed to the Kimberley Process.
De Beers Diamond Jewellers
In 2001, De Beers entered into a retail joint venture with French luxury goods company Louis Vuitton Moet Hennessy (LVMH) to establish an independently managed De Beers diamond jewellery company.The joint venture, called De Beers Diamond Jewellers Ltd sells diamond jewellery. The first De Beers boutique opened in 2002 on London's Old Bond Street as the brand's flagship store. A year later, the brand expanded to Asia with the opening of their first Tokyo stores. The brand expanded into the United States with a store on 5th Avenue in New York and Rodeo Drive in Beverly Hills in 2005. De Beers further expanded in the United States in 2007 with stores in Las Vegas, Houston, Dallas, and McLean, VA, coinciding with the launch of a website with e-commerce capability. There are now De Beers retail stores in England, France, Ukraine, Russia, Japan, Taipei
Taipei
Taipei City is the capital of the Republic of China and the central city of the largest metropolitan area of Taiwan. Situated at the northern tip of the island, Taipei is located on the Tamsui River, and is about 25 km southwest of Keelung, its port on the Pacific Ocean...
, Hong Kong, Macau
Macau
Macau , also spelled Macao , is, along with Hong Kong, one of the two special administrative regions of the People's Republic of China...
, Dubai
Dubai
Dubai is a city and emirate in the United Arab Emirates . The emirate is located south of the Persian Gulf on the Arabian Peninsula and has the largest population with the second-largest land territory by area of all the emirates, after Abu Dhabi...
and the United States.
Marketing
Over the last century, De Beers has been highly successful in increasing consumer demand for diamonds. One of the most effective marketing strategies has been the marketing of diamonds as a symbol of love and commitment.A young copywriter working for N. W. Ayer & Son, Frances Gerety, coined the famous advertising line "A Diamond is Forever" in 1947. In 2000, Advertising Age
Advertising Age
Advertising Age is a magazine, delivering news, analysis and data on marketing and media. The magazine was started as a broadsheet newspaper in Chicago in 1930...
magazine named "A Diamond Is Forever" the best advertising slogan of the twentieth century.
Other successful campaigns include the "eternity ring
Eternity ring
An eternity ring is a lady's ring, worn on the hand, comprising a band of precious metal set with a continuous line of identically cut gemstones to symbolize never-ending love, usually given from a husband to his wife on the occasion of a significant anniversary.Because the presence of stones all...
" (as a symbol of continuing affection and appreciation), the "trilogy" ring (representing the past, present and future of a relationship) and the "right hand ring" (bought and worn by women as a symbol of independence).
De Beers is also known for its television advertisements featuring silhouettes of people wearing diamonds, to the music of Palladio by Karl Jenkins
Karl Jenkins
-Other works:*Adiemus: Live — live versions of Adiemus music*Palladio *Eloise *Imagined Oceans *The Armed Man: A Mass for Peace...
. A 2010 commercial for Verizon Wireless
Verizon Wireless
Cellco Partnership, doing business as Verizon Wireless, is one of the largest mobile network operators in the United States. The network has 107.7 million subscribers as of 2011, making it the largest wireless service provider in America....
parodied the De Beers spots.
Forevermark
De Beers has introduced Forevermark diamonds to markets in China, Hong Kong, India and Japan. According to the company, forevermark diamonds, "are natural, untreated, responsibly sourced, and cut and polished by a specially selected diamantaireDiamantaire
A diamantaire is sometimes referred to as a "gem-quality diamond manufacturer or producer", "master diamond cutter" and a "graduate gemologist ."...
." Forevermark diamonds have an icon and identification number inscribed on the table facet of the diamond. The inscription is about 0.05 µm deep and applied using an undisclosed De Beers technology developed in Maidenhead
Maidenhead
Maidenhead is a town and unparished area within the Royal Borough of Windsor and Maidenhead, in Berkshire, England. It lies on the River Thames and is situated west of Charing Cross in London.-History:...
, United Kingdom, and Antwerp, Belgium.
Sherman Antitrust Act
During World War II, Ernest Oppenheimer attempted to negotiate a way around the Sherman Antitrust ActSherman Antitrust Act
The Sherman Antitrust Act requires the United States federal government to investigate and pursue trusts, companies, and organizations suspected of violating the Act. It was the first Federal statute to limit cartels and monopolies, and today still forms the basis for most antitrust litigation by...
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.
Gem diamonds
From 2001 onwards several lawsuits were filed against De Beers in US State and Federal courts. These alleged that De Beers unlawfully monopolized the supply of diamonds and conspired to fix, raise and control diamond prices. Additionally there were allegations of misleading advertising. While De Beers denied all allegations that it violated the law, in November 2005, De Beers announced that an agreement had been reached to settle civil class action suits filed against the company in the United States, and in March 2006, three other civil class action suits were added to the November agreement. In April 2008, De Beers confirmed that Judge Chesler of the US Federal District Court in New Jersey had entered an order approving the Settlement, resulting in a settlement arrangement totaling $295 million USD. De Beers does not admit liability. As part of the settlement, persons who purchased gem diamonds from 1 January 1994, to 31 March 2006, may be eligible for compensation.Industrial diamonds
In 2004 De Beers pleaded guilty and paid a $10 million fine to the United States Department of Justice to settle a 1994 charge that De Beers had colluded with General ElectricGeneral Electric
General Electric Company , or GE, is an American multinational conglomerate corporation incorporated in Schenectady, New York and headquartered in Fairfield, Connecticut, United States...
to fix the price of industrial diamonds.
European Competition Commission
In February 2006, De Beers entered into legally binding commitments with the European CommissionEuropean Commission
The European Commission is the executive body of the European Union. The body is responsible for proposing legislation, implementing decisions, upholding the Union's treaties and the general day-to-day running of the Union....
to cease purchasing rough diamonds from Alrosa
Alrosa
ZAO ALROSA , is Russia's largest diamond company. Alrosa is engaged in the exploration, mining, manufacture and sale of diamonds. The company's operations are located primarily in the Sakha Republic/Yakutsk region. Alrosa accounts for approximately 25% of the world's rough diamond supply and 97%...
as of the end of 2008. In January 2007, the European Commission
European Commission
The European Commission is the executive body of the European Union. The body is responsible for proposing legislation, implementing decisions, upholding the Union's treaties and the general day-to-day running of the Union....
announced it had rejected all outstanding complaints against the Diamond Trading Company
Diamond Trading Company
The Diamond Trading Company is the rough diamond sales and distribution arm of the De Beers Family of Companies. The DTC sorts, values and sells approximately 75% of the world’s rough diamonds by value...
's Supplier of Choice sales strategy.
Conflict diamonds and the Kimberley Process
In 1999 a campaign by Global WitnessGlobal 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 Washington, D.C.. Global Witness states that it does not have...
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 Savimbi
Jonas Malheiro Savimbi was an Angolan political leader. He founded and led UNITA, a movement that first waged a guerrilla war against Portuguese colonial rule, 1966–1974, then confronted the rival MPLA during the decolonization conflict, 1974/75, and after independence in 1975 fought the ruling...
's UNITA
UNITA
The National Union for the Total Independence of Angola is the second-largest political party in Angola. Founded in 1966, UNITA fought with the Popular Movement for the Liberation of Angola in the Angolan War for Independence and then against the MPLA in the ensuing civil war .The war was one...
movement in Angola, which was found to have bartered uncut diamonds for weaponry, thereby allowing the civil war
Angolan Civil War
The Angolan Civil War was a major civil conflict in the Southern African state of Angola, beginning in 1975 and continuing, with some interludes, until 2002. The war began immediately after Angola became independent from Portugal in November 1975. Prior to this, a decolonisation conflict had taken...
to continue in 1998 despite international economic and diplomatic sanctions being in effect through United Nations Security Council Resolution 1173
United Nations Security Council Resolution 1173
United Nations Security Council Resolution 1173, adopted unanimously on June 12, 1998, after reaffirming Resolution 696 and all subsequent resolutions on Angola, particularly Resolution 1127 , the Council announced its intention to impose further sanctions against UNITA for non-compliance, unless...
.
In 1999, De Beers decided to stop all outside buying of diamonds in order to guarantee categorically the conflict-free status of De Beers diamond, effective from 26 March 2000.
In December 2000, following the recommendations of the Fowler Report
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-imposed sanctions...
, the UN adopted the landmark General Assembly Resolution A/RES/55/56 supporting the creation of an international certification
Certification
Certification refers to the confirmation of certain characteristics of an object, person, or organization. This confirmation is often, but not always, provided by some form of external review, education, assessment, or audit...
scheme for rough diamond
Rough Diamond
Rough diamond refers to a diamond which has not yet been cut, but may also refer to:* Rough Diamond , a drama series by BBC Northern Ireland* Rough Diamond , a British progressive rock band...
s. By November 2002, negotiations between governments, the international diamond industry and civil society organizations resulted in the creation of the Kimberley Process Certification Scheme (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. The Kimberley process has helped restore the reputation of the industry, as well as eliminating sources of excess supply.
Forceful relocation of indigenous Bushman people in Botswana
In Botswana, a long dispute has existed between the interestInterest
Interest is a fee paid by a borrower of assets to the owner as a form of compensation for the use of the assets. It is most commonly the price paid for the use of borrowed money, or money earned by deposited funds....
s of the mining company, De Beers, and the relocation
Population transfer
Population transfer is the movement of a large group of people from one region to another by state policy or international authority, most frequently on the basis of ethnicity or religion...
of the Bushman
Bushmen
The indigenous people of Southern Africa, whose territory spans most areas of South Africa, Zimbabwe, Lesotho, Mozambique, Swaziland, Botswana, Namibia, and Angola, are variously referred to as Bushmen, San, Sho, Barwa, Kung, or Khwe...
tribe from the land, in order to exploit diamond resources. The Bushmen have been facing threats from government policies since at least 1980, when the diamond resources were discovered. A campaign is being fought in an attempt to bring an end to what the indigenous rights organization, Survival International
Survival International
Survival International is a human rights organisation formed in 1969 that campaigns for the rights of indigenous tribal peoples and uncontacted peoples, seeking to help them to determine their own future. Their campaigns generally focus on tribal peoples' fight to keep their ancestral lands,...
considers it to be a genocide
Genocide
Genocide is defined as "the deliberate and systematic destruction, in whole or in part, of an ethnic, racial, religious, or national group", though what constitutes enough of a "part" to qualify as genocide has been subject to much debate by legal scholars...
of a tribe that has been living in those lands for tens of thousands of years. On the grounds that their hunting and gathering has become obsolete and their presence is no longer compatible with preserving wildlife resources, they were persecuted by the government in order to make them leave the reserve
Nature reserve
A nature reserve is a protected area of importance for wildlife, flora, fauna or features of geological or other special interest, which is reserved and managed for conservation and to provide special opportunities for study or research...
. To get rid of them, they have had their water supplies cut off, they have been taxed, fined, beaten, and tortured as per land clearing requests by De Beers. Several international fashion models, including Iman
Iman (model)
Iman Mohamed Abdulmajid , professionally known as Iman , is a Somali-American fashion model, actress and entrepreneur. A pioneer in the field of ethnic cosmetics, she is also noted for her charitable work. She is married to David Bowie.-Early life:Born in Mogadishu, Somalia, Iman is the daughter...
, Lily Cole
Lily Cole
Lily Luahana Cole is an English model and actress. Cole's modelling career was launched by a chance encounter with Benjamin Hart in Soho, London when she was 14....
and Erin O'Connor
Erin O'Connor
-Early life:Erin O'Connor was born and brought up in the Metropolitan Borough of Walsall, England and went to Brownhills Community School . She was raised Catholic and her father is from Ballycastle, Northern Ireland...
, who were previously involved with advertising for the companies' diamonds, have backed down after realizing the consequences raised by this scandal
Scandal
A scandal is a widely publicized allegation or set of allegations that damages the reputation of an institution, individual or creed...
, and now support the campaign.
External links
- De Beers Group official web site
- De Beers Canada official web site
- Debswana official web site
- Namdeb official web site
- The De Beers Diamond Stakes Trophy
- Diamdel official web site
- www.e6.com Element Six official web site
- De Beers History, published 1982
- Diamond Facts
- Diamond Development Initiative
- Kimberley Process - rough diamond statistics site
- De Beers reports
- De Beers, Diamonds and Botswana - video story
- Kimberley Process official web site
- African Diamond Council official web site
- From Mine to Mistress by Chaim Even-Zohar, Corporate Strategies and Government Policies in the International Diamond Industry
- Epstein, Edward Jay (1982). "THE DIAMOND INVENTION" (Complete book. An in-depth research into the history of De Beers as a company and the development of the modern diamond market)
- Debeers Real Plan