DeBeers
“A Diamond is Forever”

Prepared April 16, 2012

For decades, De Beers has been the preeminent name in diamonds. Thanks to a stockpile of the world's rough diamond supply, indelible marketing schemes and even negotiations with foreign governments for their diamonds, De Beers has been the most important name in one of the world's most lucrative businesses for almost a century. This paper will review the billion dollar rise and fall of a monopoly that has crushed competitors and cash-strapped governments since the 1800s. Diamonds became a symbol of love thanks to De Beers, which is fitting, since De Beers became what it is today because of a love story: the love of money. In the beginning, the diamond trade took place mostly in India and Brazil. With the discovery of diamonds in South Africa, the trade simultaneously took off and became much less profitable. Up until the mid-1800s, diamonds were a rarity and could be seen only on the hand of a monarch. But the diamond rush that began in South Africa in the second half of the 19th century flooded the market with diamonds, killing demand. It would take some ingenious plotting and advertising to keep the diamond's reputation as intrinsically valuable and desirable, which is where De Beers comes in (Goldschein, 2011).

Company History and Overview
De Beers got its start when English-born businessman Cecil Rhodes, broke into the diamond business in South Africa by renting water pumps to miners before buying diamond fields of his own. Rhodes, sensing he had ventured into an untapped market, bought up diamond fields, including one owned by two brothers named "de Beer." In 1880, he bought the claims from his rival Barney Barnato to create the De Beers Mining Company. The tendency in diamond mining is to combine smaller groups in order to form larger ones. Individuals who need a common infrastructure form