De Beers, A History

End of the 1400s A diamond cutter in Antwerp, Belgium invents the scaif. The scaif revolutionizes diamond cutting.

Early 1700s The world’s supply of diamonds comes from India exclusively.

1725 Diamonds discovered in Brazil.

1852 Barney Barnato is born in London.

1869 Diamonds discovered, for the first time on the African continent, in South Africa.

September 1870 Cecil John Rhodes arrives in South Africa to join his brother (and over 50,000 others) in prospecting for diamonds. The encampment would grow into a city and be named Kimberly. Rhodes would gain control of various mines not through prospecting himself, but by taking a share of others’ mines in exchange for use of the only steam-powered pump in South Africa, which he had invested in.

1873 Barnato arrives in Kimberly. He parlays jobs selling cigars to mine workers and performing cabaret into buying and selling diamonds. He eventually is able to buy claims.

1880 Rhodes merges with two other mining syndicates to form the De Beers Mining Company. Under its charter, De Beers could also, “lay telegraph wires, annex territories, raise armies and install governments.”

1888 Rhodes and some investors, fearing the effects of a flooded diamond market, complete their purchase of Barnato’s company. He acquiesces to the merger, becoming the largest single shareholder in De Beers.

1890 Rhodes controls 95% of the world’s diamond production.

1893 The syndicate of diamond merchants in London Rhodes will sell to consist of ten interconnected firms.

1897 Barney Barnato dies, having either fallen or jumped from an ocean liner. He had been acting in amateur theatre productions in Kimberly, and was one of the world’s richest men.

1902 Cecil Rhodes dies. Though he was unable to bring the entire African continent into the British Empire, he lived long enough to see a country named for him (Rhodesia). He never married and had no heirs, he leaves his fortune to Oxford University and establishes the Rhodes scholarship. Another provision in his will sets aside money to form a secret society dedicated to reclaiming the United States for the British Empire.

1902 In the employ of one of Rhodes’ merchants, Ernest Oppenheimer is sent to Kimberly to run the merchant’s buying office.

1908 Diamonds found in a German colony (the colony would become Namibia). This could break the De Beers monopoly.

1910 Oppenheimer concludes that diamonds must be made scarce if they are to remain valuable.

1914 De Beers gets a reprieve when World War One breaks out, and the South African government seizes and shuts down the Namibian diamond find.

1917 With the South African government under pressure to expropriate the assets of Britain’s enemies, Oppenheimer creates the Anglo-American Corporation. He uses the entity to gain control of German investors’ claims to the Namibian diamonds by laundering their money.

1919 Oppenheimer organizes his acquired German properties into Consolidated Mining Mines. Echoing Rhodes’ strategy, he offers the Namibian mines to De Beers in exchange for a large chunk of stock. He is given a seat on the board of directors and continues to buy shares at every opportunity.

1929 Oppenheimer becomes chair of the board. The king of England also knights him.

1931 Worldwide economic depression has the price of diamonds well below cost, and the London diamond syndicate on the verge of bankruptcy. To prevent a collapse in the price of diamonds, Oppenheimer buys out the distribution syndicate. The Diamond Trading Company is created to allocate diamonds to manufacturers and wholesalers.

1933 To curtail the supply of diamonds, Oppenheimer closes all the major South African mines. Diamond production for that year is 14,000 carats, down from 2,242,000 in 1930. De Beers also issues bonds to finance its purchases of diamonds from newly discovered mines in Belgian Congo and Portuguese Angola.

1937 The De Beers stockpile of diamonds is 40,000,000 carats. The diamond-grinding wheel is also invented. It saves De Beers from bankruptcy and debt by making diamonds integral to the mass production of cars, machinery and airplanes.

1938 Harry Oppenheimer, seeking to protect the diamond from changing tastes and fashion trends by controlling demand for diamonds as well as supply, travels to the US to meet with a leading advertising agency, N.W. Ayer. Though the diamond engagement ring has been a tradition for many decades at this point, he believes Americans can be convinced to buy more expensive diamonds through an elaborate series of advertising campaigns.

1940 FDR holds a series on emergency meetings to determine the implications of Hitler overrunning England. The concern is that if Hitler gains control of the world diamond stockpile the United States’ civilian industries would not be able to produce planes and submarines for the war effort. De Beers, not wanting to risk losing control of any part of its stockpile, refuses to sell the US the 6.5 million carats of industrial diamonds necessary to begin producing for the war.

1942 The US State Department threatens to stop supplying England with defensive armaments if the English government does not put pressure on De Beers to sell diamonds to the US. De Beers agrees to provide the Americans with one million carats, and hold the remainder of the request in a stockpile in Canada, where it will remain under De Beers' control, but be safe from Nazi capture.

1944 In a memo to the Attorney General, the US Justice Department concludes, “The United States is paying monopoly prices for an essential material needed in wartime production.” If De Beers were an American company, “There would be no question as to its having violated anti-trust laws.” The FBI interviews diamond dealers in New York to ascertain whether De Beers is transacting business in the US, but the case is abandoned in 1945.

1945 World War Two ends. The OSS, the American intelligence agency during the war, is dissolved without being able to determine how the Axis powers obtained enough industrial diamonds to last the length of the war. De Beers reopens its South African mines, anticipating a boom in engagement ring purchases deferred until after the war.

1947 A copywriter for N.W. Ayer, Frances Gerety, creates the caption “A Diamond is Forever.” Within a year, it is the official logo for De Beers. Within three years, 80% of the wedding engagements in the US are marked with a diamond. Gerety herself remained unwed her entire life, and never took part in the zeitgeist she helped create.

Early 1950s De Beers owns or controls virtually all the diamond mines on the planet.

1953 De Beers hires a former head of British counterintelligence, Percy Sillitoe, to interdict diamond smugglers in southern and western Africa. He hires a private army of mercenaries, and until 1957 his International Diamond Security Organization battles diamond smugglers (some of whom were being financed by European diamond merchants).

1955 General Electric successfully creates diamonds synthetically. It would prove much more effective and lucrative to synthetically create industrial diamonds than gem ones. Ernest Oppenheimer orders his Diamond Development Laboratories to proceed with their own synthetic program.

1957 Ernest Oppenheimer dies. His son, Harry Oppenheimer, succeeds him as the chair of De Beers and the Anglo-American Corporation.

1959 With General Electric years ahead of De Beers’ research, and on the verge of patenting their process for creating diamonds, De Beers pays GE $8 million plus royalties for the rights to produce synthetic diamonds under the process developed by GE.

1961 South Africa is expelled from the British Commonwealth.

1963 The Soviet Union, United States and most countries in Africa join in a worldwide boycott of trade with South Africa. Oppenheimer creates a complicated system of corporate fronts (registered in Luxembourg, Liechtenstein, Switzerland and England) through which De Beers continues to do business with the African nations pledged to the boycott. The corporate fronts allow deniability for the African governments opposed to the Apartheid policies of South Africa. Oppenheimer keeps Soviet diamonds off the world market by secretly buying the entire nation’s production at prices well above market.

1967 De Beers retains the world’s largest advertising agency to popularize diamond engagement rings in Japan. At the time, less than 5% of engagements in Japan involved a diamond ring. By 1981, the proportion would be around 60%.

1970 Over half the diamonds produced in the world are synthetic. A De Beers researcher named Bernard Senior resigns and moves to the island of Mauritius, intending to establish his own synthetic diamond company. De Beers responds by impounding his South African bank accounts and places irresistible pressure on South African companies to prevent them from shipping Dr. Senior the supplies he would need.

1973 De Beers is again under investigation for violating US antitrust laws.

July 1980 A bronze statue of Cecil John Rhodes is toppled in Salisbury, Zimbabwe (nee Rhodesia). Zimbabwe had become independent of the United Kingdom earlier that year.

1981 Israeli banks are holding $1.5 billion worth of diamonds in their vaults as collateral for defaulted accounts. De Beers only has cash reserves to buy a small portion of the stockpile. Fearing a crash in the value of diamonds, De Beers cuts back severely on the size and quality of diamonds it releases to the marketplace.

-An Australian diamond mine capable of producing up to 50 million carats a year is discovered. When De Beers fails to get control of the Australian diamonds, they effectively lose control of the world’s supply of diamonds.

1989 An Israeli diamond merchant, and friend of Vladimir Putin, named Lev Leviev helps the Soviet state-owned diamond firm establish its own domestic factories. Leviev insists that the factory’s diamonds be supplied directly from Russian mines and not through the De Beers system. This represents a significant loss of supply for De Beers. When the Russian factories are privatized, Leviev becomes the exclusive owner.


1994 After a three-year investigation, De Beers is indicted in the US for violating antitrust laws. De Beers is accused of exchanging price information for industrial diamonds with General Electric through a French businessman, who was both a client of GE and a director of a company distantly affiliated with De Beers. The charges against GE are eventually dismissed.

1999 Diamonds are discovered in Canada by, among others, a subsidiary of an Australian mining company. Because this subsidiary’s North American headquarters are in the US, De Beers, still under indictment, cannot partner with it. These diamonds are out of its reach.

-De Beers also realizes that year that its position as “market custodian” is no longer tenable, and sells a quarter of its London stockpile.

2000 The American economy is as prosperous as it’s ever been. De Beers sells $5.7 billion worth of diamonds, with profits greater than $1.2 billion.

2001 After being accused by the Angolan government of indirectly funding a rebel army that sold large quantities of diamonds, De Beers withdraws from the country. Leviev strikes a deal for Angolan diamonds.

-The Oppenheimer family, the Anglo-American Corporation and an exploration firm co-owned by De Beers and the government of Botswana buy all the publicly traded shares of De Beers. The total cost, $19 billion, makes it the second largest leveraged buyout in global corporate history. Now that it is privately held, De Beers no longer has to make financial reports to shareholders or securities agencies.

2002 The Angolan government defeats the rebel army and gains control of all the country’s diamond mines. Leviev’s contracts are now worth $850 million per year. This is a greater loss to De Beer’s than the Russian diamonds.

2003 Leviev opens a diamond polishing facility in Namibia’s capital city. De Beers’ sales are $5.5 billion, with profits of $676 million. It also spends $180 million on advertising.

2004 De Beers pleads guilty to the US price fixing charges and pays $10 million fine. Its executives are now free to enter the US for business purposes, and the company can now open its own retail outlets.