The diamond industry model of the 21st century should be considered as different from the diamond industry model of the 20th century. This is because there was a single company that monopolized the entire diamond industry.
Throughout the 20th century the diamond industry was monopolized by De Beer, whom some have considered used many underhand methods to achieve and sustain this monopoly on the diamond industry.
It has been suggested that the company used several tactics to take control of the market, for example, they would purchase stockpiles of diamonds that came from other competitors and then manipulated the prices through the aged old supply and demand.
Another underhand methods used was to flood the market with similar products of producers who refuse to join his monopoly.
At the time the family of companies was employing around 20.000 employers on five continents at different places around the world.
The family of companies were involved in all aspects of the diamond industry, from mining of the diamonds, to selling rough diamonds, to distribution and production and also the marketing and the making of jewelry.
The De Beer Family is credited as selling around 40% of the world’s rough diamonds, which came from their own mines or through their joint ventures with various governments.
It might be worth noting here for those who might not know, that it is not the name of a person, but it is the name of the company that was founded by Cecil Rhodes back in 1888 and which was funded by Lord Nathan Rothschild of the Rothschild family.
Cecil Rhodes started a company back in 1871 during the gold rush days selling water pumps to miners. This took place in South Africa where the largest diamond of 83.5 carats was found in Kimberly.
Using the profits from this operation he wisely invested in buying up claims from small diamond miners and in another bold move.
He secured further funds from Rothschild for a massive expansion and De Beer was created in 1888 with the merger of Cecil Rhodes and Barney Banarto, who subsequently became the owners of all the mining production in South Africa.
Cecil Rhodes was afraid that one day someone will find another diamond mine and that is just what happened, enter the Cullinan mine, which was discovered in 1902 and was to De Beer’s major competitor and subsequently the cause of the end of De Beer monopoly.
The owner of the mine refused an invitation to join the monopoly opting instead to do business with the Bernard and Ernest Oppenheimer, which delivered another blow to De Beer’s cartel.
The Cullinan mine was so successful that they are credited with finding the second largest diamond ever found, The Cullinan Diamond and their production soon matched that of De Beers.
However, business being the way that it is De Beer soon obtain ownership of The Cullinan mining industry sometime during the 1st world war.
In 1902 after the death of Cecil Rhodes the De Beer company had been controlling over 90% of the diamond production of the world.
In 2000 a number of diamond producers in places like Australia, Canada and Russia decided that they had enough of De Beer and would be seeking to distribute their diamonds outside of the De Beer cartel. It was this single act the saw the end of the De Beer monopoly.