Do you think that price fixing, cutting out the competition and monopolizing, insider trading, destruction, death and mayhem are exclusively the domain of organized crime? No, I’m not talking about a drug kingpin or an organized crime family, I’m talking about diamonds. Actually, I’m talking about one diamond-hocking family – the Oppenheimers – that have controlled most of the world’s raw diamond supply and distribution since the 1920s. They control almost every application of diamonds, too, from industrial, jewelry, and even the mining of the gems. In all irony, the De Beers company is often called a cartel (yeah, as in drug cartel), and you’ll soon see that it isn’t completely untrue.
The Dirty Diamond
Let’s start way, way back around the time where the only diamonds in the world were mined in India and Brazil. The gem was so sought after and rare that you would either have to be a royal or elite to wear one, or kill a royal or elite to get one (hey, it was a violent time in history, just calling them as I see them). But that changed pretty quickly when South African diamonds were found, resulting in the market being flooded with the rock thus dropping the prices because that whole supply and demand thingy happened.
The Englishman by birthright Cecil Rhodes found himself in the midst of this sh*t-storm in South Africa. As he twisted his 1800s mustache with glee, he said, “I’ll rent water pumps to diamond miners.” Eventually, he got wise to the fact that diamonds were worth more money than rented water pumps and decided to buy a couple of diamond fields. In just a couple of years, he had managed to make a couple of diamond fields into “almost all diamond mines and fields in South Africa” resulting in a pretty little Cecil-controlled monopoly.
You think Cecil would rest on his laurels, though? Of course not! He started controlling the supply and demand by creating the so-called Diamond Syndicate which distributed gems all over the world with its primary branches being the Diamond Trading Company in London and the Syndicate in Israel. Also, because Cecil’s and his company De Beer’s interests were parallel to other diamond claim holders and distributors (their interests being the inflation of diamond prices), almost every single diamond supplier, distributor and seller readily joined De Beer’s Diamond Syndicate.
The Ascension atop Diamond Mountain
The Oppenheimers were a pair of diamond-dealing brothers of German descent –why is this relevant? Be patient, you’ll see in a second. Not the German thing but the diamond-dealing part.
So, the founder and then owner of De Beers, Cecil Rhodes, was well on his way to monopolizing diamond mining in South Africa, when a pesky mine called Premier produced a meteor-sized 530-carat rough diamond. Cecil’s ear perked up as his eyes cartoonishly turned into Princess cut diamonds and he ran out of his office leaving a puff of smoke behind him to buy up the Premier Mine (according to historical documents). When Cecil arrived at the mine though, he was turned away with an audible “wah wah waaaaaah” (again according to historical documentation).
Finally, this is where the Oppenheimers come in. The two brothers, through black magic and spilling chicken blood on virgins, became the exclusive dealers of Premier. Within a few years, that one single mine was producing more diamonds than all of De Beers’ mines. This weakened the Syndicate’s hold on the diamond market, but not for very long, as you’ll see. Just a few years later, one of the Oppenheimer brothers was put in charge of the London branch of the Diamond Syndicate.
The Mine Runs Deeper, Though
Cecil stayed in control of De Beers for most of his life but, unlike diamonds, Cecil isn’t for forever. In 1902, Cecil died leaving De Beers in charge of 90 percent of the world’s diamond mining and distribution. The Oppenheimers, though, weren’t quite out of the picture because, in 1927, Ernest Oppenheimer bought stock in the company and a place as chairman of the board. Under Oppenheimer, De Beers would start on its path to becoming the dirtiest, most unethical diamond totalitarian we know and love today.
How to Create a Monopolizing Empire
After years of setting up the prerequisites to completely control the global diamond market, and successfully doing so, De Beers went on to the next step, creating demand. One faithful day, a copywriter by the name of Frances Gerety mind-birthed the now famous phrase “Diamonds are Forever”, and a marketing campaign was created to convince western consumers that diamonds = love, and western consumers fell for hook, line and shiny round-cut sinker. They also constructed the idea of an engagement ring, an eternity ring (symbolizing eternal affection), the trinity ring (with three stones that represented the past, present and future of the relationship), and the right hand ring (which was bought by women for women to symbolize independence).
The Fake Rarity
The successful diamonds = love campaign created an increase in demand and, by restricting supply, De Beers managed to inflate the price of diamonds to never seen before prices. De Beers managed to convince suppliers to sign exclusive contracts with the Central Selling Organization (another Branch of the Diamond Syndicate, but this time a Eurocentric arm, which I’m sure involved expensive cheeses and grinding techno music). These contracts would disallow the suppliers to purchase diamonds from any other source than De Beers. The company would set the prices, decide how many diamonds would be sent to market, and pay the producers a cut of the profits. After taking over the European market like another very (in)famous German, Oppenheimer set his sights on South America and Japan, successfully brainwashing those regions into buying inflated priced rocks. When Russia found diamonds in Siberia, instead of trying to compete with them, De Beers just decided to purchase anything and everything they produced, yet again monopolizing the diamond supply market.
This has become as convoluted as a spy novel, but stick with me, it’s almost over. Finally, after an 80-year dictatorship over the diamond supply of the world, De Beers was bought out by Anglo America which already had a 45-percent stake in the company. Anglo America is also a diamond mining company that started around the same time as De Beers, by the – get this – Oppenheimer brothers to sell the Premier Mine diamonds. So, one Oppenheimer-run company is being sold to yet another Oppenheimer-founded company… that’s not sketchy at all!
Do want to add anything else about the diamond industry? Let me know in the comments section below! And remember: instead of buying diamonds, opt for coprolite is much cleaner.