De Beers is the world’s largest diamond company. The De Beers Group controls companies in the diamond mining, diamond processing and diamond trading sectors; and is active in all avenues of diamond mining – open-pit mining, underground mining, alluvial mining and offshore mining.
De Beers owns diamond mines in Botswana, Namibia, South Africa and Canada.
Founded in 1888, De Beers is the product of a merger between the Cecil Rhodes and Barney Barnato companies. The Oppenheimer family took over De Beers in 1927, and today it is chaired by Nicky Oppenheimer.
In 1889, Rhodes struck an agreement with the London diamond syndicate under which the syndicate agreed to purchase a fixed amount of diamonds at a pre-set price, thus granting the company de facto control over production and prices – control that lasted until the late 20th century.
De Beers convinced independents producers to join its distribution cartel, flooded the market with diamonds similar to those produced by those who refused to join the cartel, and stockpiled diamonds to control prices.
Changes in production, market and consumer preferences eventually forced De Beers to change its operation model, from one based on controlling supply to one based on demand. The change resulted in a spike in company profits, despite its shrinking market share.
During the early 2000s, De Beers faced several lawsuits in the United States, alleging that it had conspired to control and fix diamond prices. The company denied any wrongdoing, but eventually reached a $295 million settlement, as part of a class action suit.
In 2004, De Beers, along with General Electric, admitted to antitrust violations and to conspiring to fix prices in the $500 million industrial diamond market, and was ordered to pay the US Department of Justice a $10 million fine.
Nevertheless, the company’s marketing efforts are considered highly successful and have driven up diamond demand. The company’s signature strategy has been – and still remains – marking diamonds as a symbol of love and commitment. The company’s 1940s slogan – “diamonds A Diamond is Forever” – has been voted the most successful slogan in the 20th century.
