As recently as the s, it dominated and controlled the industry - and by any means necessary. Through strategic campaigns, and underhanded business practices, they controlled supply, demand, and pricing with an iron fist. Until the midth century, very few people proposed with a diamond, and when they did, the stones were typically smaller and of lower quality.
What changed? Not the diamonds, of course! The perception of diamonds is what shifted, and this is due to De Beers exceptionally effective marketing. One brilliant tagline catapulted the diamond industry to prominence. After the Great Depression, during which demand for diamonds understandably died, De Beers was looking for a way to boost sales.
Diamonds were now not just beautiful stones, formed over billions of years, they were symbols of romance, enduring love, and commitment and, of course, the bigger the diamond, the greater the love.
De Beers was able to create and stoke demand for their product; now, they had to control supply. The corporation touches everything along the diamond supply chain, from mining to distribution - and in their heyday, they did so with ruthless precision. De Beers was able to control not only who was allowed to buy, but how much. The structure of the business remained the same for much of the 20th century: A De Beers subsidiary would buy the diamonds.
De Beers would determine the amount of diamonds they wanted to sell, and at what price, for the whole year. Each producer would then get a cut of the total output, and buyers would take their diamonds to be resold in places like Antwerp and New York. Henry, son of Ernest, traveled to New York in to meet with advertising agency N. The United States was seen as the next big market for diamonds, and a very effective game plan was formed to sell diamonds to Americans: convince them that diamonds equated love.
Movie stars were shown wearing diamonds in the relatively new motion pictures. And the most effective piece of advertising came in , with the creation of the tag line "A diamond is forever. As a result of these campaigns, the number of brides receiving engagement rings, and diamond prices in the U. Photo by Roel Wijnants Fotografie. Japan never had a tradition of romantic marriage, making diamonds a tough sell for brides. And even by , no imported diamonds were allowed into the country by the postwar government.
But by using slick advertising, playing up diamonds as a symbol of the modern West, or a way to break from traditional Japanese norm, De Beers was able to build a billion-dollar-a-year industry. By , almost 60 percent of Japanese brides wore diamonds , up from 5 percent in The discovery of diamonds in Siberia in the s was a threat to the control De Beers kept over the diamond supply.
Rather than compete with Russian diamonds, De Beers offered to buy almost everything that came out of Siberia — funneling all the world's diamonds through a "single channel.
Even though Russian diamonds were smaller, their use in "eternity rings" and other miniature jewelry proved very successful, and allowed for a lucrative partnership between De Beers and the USSR. Diamonds from Botswana were considered valuable enough to give the government of the country a 15 percent share in De Beers in All rough-diamond mining and distributing is done by Debswana, making it the biggest non-government employer in the country.
The deal is still in place today, and there's even talk of increasing Botswana's share to 25 percent. Numerous "revolts" against the De Beers cartel had occurred in places like Zaire and Israel over the years, which were mostly quashed by De Beers releasing stockpiles of diamonds similar to that county's product, driving down demand.
But more recently, countries with enormous stockpiles of their own, like Russia, Canada and Australia , have refused to cooperate with the single channel system. These problems, along with issues of flat prices, forced De Beers to switch up the company's strategy. In the last decade De Beers has moved away from rough-diamond supplying and controlling the entire industry, instead focusing on promoting its own brand of diamonds and retail stores.
De Beers reported a 74 percent increase in profits in the first half of this year alone. And the number of De Beers stores worldwide has risen from just one in to 39 in , with 17 in Asia alone. Although all the largest mining companies have operations in the main diamond producing countries, DRC and Zimbabwe are the two exceptions, where diamond deposits are mined by prospectors and small companies.
The company has nine major diamond fields and 10 alluvial mines. The main reason for ALROSA ranking in top spot amongst the biggest diamond mining companies of the world today is due to a single diamond field called Verkhne-Munskoye, which it is the exclusive owner of. Its total diamond output in amounted to De Beers has been in the diamond business since when it was founded by British politician and businessman Cecil Rhodes in South Africa.
Although it has been labelled by critics as a diamond cartel established to monopolise the industry, it appears to have wiped out any veracity to such claims in recent years.
De Beers not only has mining and manufacturing operations of diamonds but also sells and distributes rough diamonds through Diamond Trading Company DTC. De Beers Diamond Jewellers Ltd. No private mining operations are allowed in the country, with all of its diamond mining activities controlled by Debswana.
The firm operates four diamond mines called Orapa, Jwaneng, Letlhakane and Damtshaa mines. Having previously been recognised as one of the poorest nations on earth, the country can thank Debswana for being one of the main reasons for that growth.
The diamonds mines of Orapa and Jwaneng have their own sorting facilities within the mine premises.
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