The De Beers Company
De Beers is still the most important diamond producing company.
Founded in 1888 for the exploitation of the mines of South Africa, De Beers is nowadays present in numerous countries, still remaining very active in the countries where the first mining activities were starte
The discovery of the magnificent mines of Kimberley in 1870 on the farm of the De Beers brothers, was what led to the founding of the De Beers Consolidated Mines.
This discovery, which placed South Africa in the top of the world’s production, attracted an enormous amount of adventurers who started to exploit an incredible amount of different claims, working each for themselves, side by side in total anarchy.
It was the need for organization and funding larger operations which forced Cecil Rhodes, the founder of the De Beers Company, to work with his much larger competitor to found De Beers Consolidated Mines.
More and more land was bought and mining activities in other mines were taken over, and 10 years later the new association controlled 90% of the world’s production.
This pseudo monopoly enabled them to control the sale of diamonds and to regulate price.
The position of De Beers was threatened by the discovery of competing mines in Africa.
In 1930, under supervision of Sir Ernest Oppenheimer, a central buying organization to all producers (Diamond Trading Company) and an organization dedicated to selling, the CSO (Central selling Organization) were founded.
The production that was not directly controlled by De Beers, was sold directly from the producing countries to the main cutting districts : Antwerp, New York, Tel-Aviv and Bombay.
The pyramid-like control by De Beers enabled them to regulate the output and maintain the price. This system has proven itself despite crises, for example the crisis in the 1930’s, and assured the industry to remain stable.
The diamond market was remaining untouched through all the movements in the world’s history.
Nowadays the world production is in the hand of three major Companies : De Beers – Rio Tinto Zinc and Alrosa. Today the official seat of the Holding De Beers is located in Southdale, close to Johannesburg in South Africa. It is mostly controlled by the Anglo American Company and by the Oppenheimer family.