 |
| |
 |
| |
 |
| |
 |
| |
 |
| |
 |
| |
 |
| |
 |
| |
 |
| |
 |
| |
 |
and the
Supply Chain
The diamond "invention" (creation of the idea that diamonds are
rare and valuable, and are essential signs of esteem) is a relatively
recent development in the history of the diamond trade. Until the
late nineteenth century, diamonds were found only in a few
riverbeds in India and in the jungles of Brazil, and the entire world
production of gem diamonds amounted to a few pounds a year.
In 1870, however, huge diamond mines were discovered near the
Orange River, in South Africa, where diamonds were soon being
scooped out by the ton. Suddenly, the market was deluged with
diamonds. The British financiers who had organized the South African
mines quickly realized that their investment was endangered;
diamonds had little intrinsic value -- and their price depended almost
entirely on their scarcity. The financiers feared that when new mines
were developed in South Africa, diamonds would become at best only
semiprecious gems.
The major investors in the diamond mines realized that they had no
alternative but to merge their interests into a single entity that
would be powerful enough to control production and perpetuate the
illusion of scarcity of diamonds. The instrument they created, in
1888, was called De Beers Consolidated Mines, Ltd., incorporated in
South Africa.
As De Beers took control of all aspects of the world diamond trade, it
assumed many forms. In London, it operated under the innocuous
name of the Diamond Trading Company. In Israel, it was known as
"The Syndicate." In Europe, it was called the "C.S.O." -- initials
referring to the Central Selling Organization, which was an arm of
the Diamond Trading Company. And in central Africa, it disguised its
South African origins under subsidiaries with names like Diamond
Development Corporation and Mining Services, Inc. At its height --
for most of this century -- it not only either directly owned or
controlled all the diamond mines in southern Africa but also owned
diamond trading companies in England, Portugal, Israel, Belgium,
Holland, and Switzerland.
The diamond trade structure includes both large and small
well-organized components as well as many smaller, uncontrolled
operations. While De Beers controls a large percentage of the
diamond shipments to key trading centers, UN data suggest that
more than 100 countries worldwide participate in rough diamond
exporting. In the past few years, new sources of rough diamonds
from Australia, Russia, Canada and parts of Africa have considerably
changed the controlled single-market system in a number of ways. A
significant quantity and variety of these "outside" rough diamonds
have always been sold on the open market and go directly to a
select number of diamond manufacturers in the cutting centers, but
strains are showing as the volume of diamonds distributed outside
the De Beers cartel grows. (click below diagram for more detail on
"Sightholders" and the "De Beers logo" to connect to "De Beers
web-site")
purchased by Graff London
 | |  | |  | |  |
