by Shikha

Created on: June 17, 2008

A diamond is forever'. This catchy phrase is what has made DeBeers synonymous with diamonds. They created the idea that diamonds are rare and beautiful and equated it with love. Suddenly everyone knew that diamonds never break or crack and became a prestigious thing to own, expensive too.

HISTORY
In the late 19th century, numerous diamond mines were discovered in South Africa. And the major British investors were looking for ways in which to protect and gain profit from their investments. The only way to do it was to make diamonds scarce. So they merged to form the De Beers Consolidated Mines, Ltd in South Africa. And from there it grew on to manage diamond mines across the world.

Today De Beers is involved in every aspect of diamond mining including open-pit, underground, large-scale alluvial, coastal and deep sea. They have been under the control of a single family for years, the Oppenheimers.

MONOPOLY
For most of the 20th century, De Beers sold 85% to 90% of the diamonds mined worldwide making it the largest diamond producer in the world. The monopoly was not just the result of smart price fixing but because of the image of diamonds as a symbol of love. Diamond studded rings for engagements and weddings have become the norm. And very few sell their tokens of commitment. Their advertising campaigns even reached high schools to educate' girls! Diamonds thus became forever'.
While the prices of commodities like gold and silver fluctuated wildly according to the market conditions, diamond prices have remained steady all these years. In order to curtail any competition, De Beers bought newly discovered mines throughout the world.

CONTROVERSIES
The De Beers policy in the nineties was to buy only those diamonds which were legitimately traded and were not used to fund any of the civil wars in Africa. But still they came under scrutiny and were believed to be trading in conflict diamonds or blood diamonds. In 1999, with a new zero tolerance policy De Beers ensured that their diamonds were of conflict free status.

De Beer pleaded guilty in a price fixing case a few years back. When the case was open, for ten years De Beers was not able to deal directly with the world's largest diamond market which is the USA, and De Beers' directors could not set foot in the country for fear of being arrested. They were fined $10 million and are back in the US markets. If you see a diamond today chances are it came from De Beers.

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