De Beers
The De Beers Group is a South African[3]-British corporation that specializes in the diamond industry, including mining, exploitation, retail, inscription, grading, trading and industrial diamond manufacturing. The company is active in open-pit, underground, large-scale alluvial and coastal mining. It operates in 35 countries with mining taking place in Botswana, Namibia, South Africa, and Canada. It also has an artisanal mining business, Gemfair, which operates in Sierra Leone.
Industry
1888
London, England, UK
Worldwide
- Duncan Wanblad (Chairman)
- Al Cook (CEO)
Diamond mining, marketing, grading and jewellery
- Anglo American plc (85%), Government of Botswana (15%) [2]
c. 20,000
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.[4] As of 2000, the company's control of the world diamond supply decreased to 63%.[5]
The company was founded in 1888 by British businessman Cecil Rhodes, who was financed by the South African diamond magnate Alfred Beit and the London-based N M Rothschild & Sons bank.[6][7] In 1926, Ernest Oppenheimer, a German immigrant to Britain and later South Africa who had earlier founded mining company Anglo American with American financier J. P. Morgan,[8] was elected to the board of De Beers.[9] 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 and trust behaviour, and was accused of not releasing industrial diamonds for the U.S. war effort during World War II.[10][11]
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.[12]
In May 2024, Anglo American announced its intention to spin off or sell De Beers.[13]
Former operations[edit]
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.[101][102][103] In April 2019, De Beers closed its IIDV division.[104]
Legal issues[edit]
Sherman Antitrust Act[edit]
During World War II, Ernest Oppenheimer attempted to negotiate a way around the Sherman Antitrust Act 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.[35] 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.[105]
Relocation of indigenous San people in Botswana[edit]
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.[106] A campaign was fought in an attempt to bring an end to what the indigenous rights organisation, Survival International, considers to be a genocide of a tribe that has been living in those lands for tens of thousands of years.[107][108][109] Several international fashion models, including Iman, Lily Cole and Erin O'Connor, who were previously involved with advertising for the companies' diamonds, supported the campaign.[110] De Beers sold its mine in Botswana to Gem Diamonds in 2007.[106]
Industrial diamonds[edit]
In 2004, De Beers pled guilty and paid a US$10 million fine to the United States Department of Justice to settle a 1994 charge that De Beers had colluded with General Electric to fix the price of industrial diamonds.[111][112] In 2008, De Beers agreed to pay a US$295 million class-action settlement after accusations of price fixing.[113] The company appealed against the decision but ended up paying the settlement in 2013.[114]
European Commission[edit]
In February 2006, De Beers entered into legally binding commitments with the European Commission 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.[115]
South Africa's rough diamond trade[edit]
In 2014, the Leverhulme Centre for the Study of Value, based at the University of Manchester, 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.[116] Sharife simultaneously published an article[117] 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.