De Beers facts for kids
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DeBeers store on Rodeo Drive in Beverly Hills, California - 2008
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| Industry | Mining and trading of diamonds |
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| Founded | 1888 |
| Founder | Cecil Rhodes |
| Headquarters |
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England
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Area served
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Worldwide |
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Key people
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| Products | Diamonds |
| Services | Diamond mining, marketing, grading and jewellery |
| Revenue |  US$6.08 billion (2018) |
| Owners |
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Number of employees
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c. 20,000 |
The De Beers Group is a famous company from South Africa and Britain. It focuses on finding, mining, selling, and trading diamonds. De Beers also helps grade diamonds and makes industrial diamonds.
The company uses different ways to mine diamonds. This includes digging big open pits, creating underground tunnels, and even finding diamonds near rivers and coasts. De Beers works in 35 countries, with mining happening in Botswana, Namibia, South Africa, and Canada. They also have a smaller business called Gemfair that helps small-scale miners in Sierra Leone.
For a long time, from when it started in 1888 until the early 2000s, De Beers controlled most of the world's rough diamond supply. This meant they were almost a monopoly, controlling about 80% to 85% of all rough diamonds. By 2000, their control had dropped to about 63%.
Cecil Rhodes, a British businessman, started the company in 1888. He got money from the South African diamond expert Alfred Beit and the Rothschild bank in London. Later, in 1926, Ernest Oppenheimer joined the De Beers board. He was a German immigrant who had also started the mining company Anglo American plc. Ernest Oppenheimer helped De Beers become even stronger in the diamond industry until he passed away in 1957. He was known for controlling the diamond market to keep prices stable.
In 2011, Anglo American took over De Beers. They bought a large part of the Oppenheimer family's shares for about US$5.1 billion. This increased Anglo American's ownership to 85% and ended the Oppenheimer family's 80-year control of De Beers.
History of De Beers
How De Beers Started
The name 'De Beers' comes from two Dutch brothers, Diederik Arnoldus de Beer and Johannes Nicolaas de Beer. They owned a farm in South Africa called Vooruitzicht, which means "prospect" or "outlook" in Dutch. When diamonds were found on their land, they sold the farm in 1871. This farm later became the site of two very successful diamond mines, the Big Hole and the De Beers mine. The company was named after these mines.
Cecil Rhodes began his journey in the diamond business by renting water pumps to miners. This was during the diamond rush that started in 1869. He used his profits to buy up small mining claims. Soon, his operations grew into a separate mining company. He also got money from the powerful Rothschild family to help his business expand.
De Beers Consolidated Mines was formed in 1888. This happened when Cecil Rhodes's company merged with another company owned by Barney Barnato. By then, De Beers owned all the diamond mining operations in the country. In 1889, Rhodes made a deal with the London-based Diamond Syndicate. They agreed to buy a set amount of diamonds at a fixed price. This helped control how many diamonds were sold and kept prices steady. This agreement worked very well. For example, during a slow trade period in 1891–1892, they simply sold fewer diamonds to keep the prices high. Rhodes worried about new diamond discoveries breaking their control.
The Second Boer War was a difficult time for the company. The city of Kimberley was surrounded by enemy forces, which put the valuable mines at risk. Rhodes himself went to Kimberley to encourage the British government to send help. Even though he disagreed with the military, Rhodes used all of De Beers's resources to help defend the city. The company workshops made shells, defenses, an armoured train, and even a large gun called Long Cecil.
Oppenheimer Takes Control
In 1898, more diamonds were found near Pretoria, South Africa. This led to the discovery of the Premier Mine. The Premier Mine started in 1902, and the Cullinan Diamond, the biggest rough diamond ever found, was discovered there in 1905. (The Premier Mine was renamed the Cullinan Mine in 2003). However, the owner of this mine did not want to join the De Beers group. Instead, the mine started selling diamonds to independent dealers, which made De Beers's control weaker.
Ernest Oppenheimer became a key figure in the diamond industry. He understood that to keep diamonds valuable, it was important to control how many were produced. He said in 1910 that "the only way to increase the value of diamonds is to make them scarce."
During World War I, the Premier mine finally became part of De Beers. When Rhodes passed away in 1902, De Beers controlled 90% of the world's diamond production. Ernest Oppenheimer became the chairman of the company in 1929. He was concerned about new diamond discoveries in German South West Africa in 1908, fearing that too many diamonds would lower prices.
In the early 1930s, De Beers helped develop the use of diamond drills. This new method was much better than older, more expensive ways of drilling. This invention helped make the Free State Gold Rush possible, as it allowed miners to drill deep to find gold.
In 1955, Ernest Oppenheimer opened new headquarters that brought together Anglo American and De Beers. After Ernest died in 1957, his son, Harry Oppenheimer, took over. Under Harry, the company grew and expanded into many countries, including Canada, Australia, and Zambia. In South Africa, Harry Oppenheimer was against apartheid, a system of racial segregation. However, De Beers still made money during this period. By 1973, Anglo and De Beers made up a large part of South Africa's economy.
During the 1960s and 1970s, De Beers tried to enter the United States diamond market. However, they had to sell their American businesses in 1975 to avoid breaking laws against monopolies. Harry Oppenheimer stepped down as chairman in 1982.
Changes in the 21st Century
In the 20th century, De Beers used several ways to control the international diamond market. They tried to get independent diamond producers to join their sales system. If producers refused, De Beers would sometimes sell many similar diamonds, which would lower prices and hurt the refusing producers. They also bought and stored diamonds from other companies or extra diamonds to control prices by limiting how many were available. They would also buy diamonds when prices fell to make them go back up.
In 2000, De Beers changed its business model. This was because new diamond producers in Canada and Australia started selling diamonds outside of De Beers's system. Also, there was growing concern about blood diamonds, which are diamonds sold to fund wars. De Beers wanted to protect its reputation, so it focused on selling only diamonds from its own mines.
Because of more competition and greater openness in the market, De Beers's share of rough diamonds dropped. It went from as high as 90% in the 1980s to 29.5% in 2019.
Seeing these changes, the Oppenheimer family decided in November 2011 to sell their 40% share in De Beers to Anglo American plc. This made Anglo American own 85% of the company, with the Government of Botswana owning the remaining 15%. This deal was worth about £3.2 billion (US$5.1 billion) and ended the Oppenheimer family's 80-year ownership of De Beers.
In 2020, De Beers announced a new commitment. They promised the world that they would not use forced labor within the company.
Diamond Marketing
De Beers has been very successful at advertising diamonds to make people want them. One of their most effective strategies was to market diamonds as a symbol of love and commitment. A copywriter named Mary Frances Gerety came up with the famous slogan, 'A Diamond is Forever', in 1947. In 2000, Advertising Age magazine called it the best advertising slogan of the 20th century. This slogan might have even inspired the James Bond film Diamonds Are Forever.
Other successful campaigns include the 'eternity ring', which symbolizes lasting affection, and the 'trilogy ring', which represents the past, present, and future of a relationship. They also promoted the 'right hand ring', which women could buy for themselves as a symbol of independence.
De Beers also ran TV ads showing silhouettes of people wearing diamonds, set to the music of 'Palladio' by Karl Jenkins. This campaign was very popular.
In May 2018, De Beers launched a new brand called "Lightbox." This brand sells synthetic diamonds, which are made in a lab. These lab-grown diamonds are much cheaper than natural diamonds. They cost about one-tenth of the price. The new brand started selling in September 2018. These diamonds are made in a facility in Gresham, Oregon, which can produce 500,000 rough carats of diamonds each year.
De Beers Operations
In Botswana, De Beers mines diamonds through a company called Debswana. This company is a 50–50 partnership with the Government of Botswana. Debswana operates four mines: Jwaneng, Orapa, Letlhakane, and Damtshaa.
In Namibia, diamond mining is done through Namdeb Holdings, which is also a 50–50 partnership with the Government of Namibia. Namdeb Holdings includes Debmarine Namibia, which mines diamonds offshore in the ocean, and Namdeb Diamond Corporation, which mines diamonds along the coast. For offshore mining, they use special ships. One of these is the SS Nujoma, a very advanced vessel that started working in June 2017.
De Beers Consolidated Mines handles the mining in South Africa. De Beers owns 74% of this company. There are two mines in South Africa: Venetia and Voorspoed.
In 2008, De Beers started mining at the Snap Lake Diamond Mine in Canada. This was De Beers's first mine outside Africa and Canada's first fully underground diamond mine. However, mining there was paused in 2015. De Beers also opened the Victor Diamond Mine in Ontario, Canada, in the same year. Their third Canadian mine, Gahcho Kue, opened in September 2016.
De Beers sells rough diamonds through two main ways: De Beers Global Sightholder Sales (GSS) and De Beers Auction Sales. GSS sells about 90% of De Beers's rough diamonds. They sort, value, and sell a large portion of the world's rough diamonds.
There are two main types of customers for rough diamonds. Sightholders have a long-term contract to buy diamonds. Accredited Buyers have a more flexible arrangement. De Beers also sells about 10% of its rough diamonds through online auctions. They were pioneers in this, holding the diamond industry's first online international auction in 2008.
De Beers employs over 30,000 people around the world. More than 17,000 of these employees are in Africa. Many people work in Botswana, South Africa, Namibia, and Canada.
In February 2020, De Beers reported its lowest earnings since Anglo American bought the company in 2012.
Business Structure and Brands
On November 4, 2011, Anglo American plc increased its ownership in De Beers to 85%. De Beers plc is the main holding company for The De Beers Group of Companies. It is involved in many parts of the diamond business, from mining to sales. It includes several joint ventures and companies that are fully owned by De Beers.
The joint ventures are:
- Debmarine Namibia
- Debswana
- DTCB
- Namdeb
- NDTC
The fully owned operations are in southern Africa and Canada. Other fully owned brands include Forevermark, De Beers Jewellers, De Beers Ventures, and the International Institute of Diamond Grading & Research.
Forevermark Diamonds
Forevermark was launched in 2008. It is one of the diamond brands from The De Beers Group. Forevermark diamonds are special because they are promised to be beautiful, rare, and sourced responsibly. Each Forevermark diamond has a tiny, invisible inscription with an icon and a unique number. This inscription helps identify Forevermark diamonds. Only a very small percentage of diamonds qualify for the Forevermark brand.
De Beers Jewellers
De Beers Diamond Jewellers (DBDJ) started in 2001 as a partnership between De Beers and LVMH, a French luxury goods company. The first De Beers store opened in London in 2002. Since then, stores have opened in many cities worldwide. In March 2017, De Beers Group took full ownership of DBDJ, and the brand was renamed De Beers Jewellers.
De Beers Ventures De Beers Ventures was created in June 2017. Its goal is to invest in new companies and growing businesses that could help De Beers Group or the wider diamond industry.
The International Institute of Diamond Grading & Research The International Institute of Diamond Grading & Research (IIDGR) was set up by De Beers in 2008. It provides services and equipment to check and verify diamonds. It has offices in London, Antwerp, and Surat, India. The IIDGR only works with diamonds that meet the rules of the United Nations' World Diamond Council Kimberley Process.
Blood Diamonds and the Kimberley Process
In 1999, a group called Global Witness brought attention to how diamonds were funding conflicts in some countries. This led to a review by the United Nations. The UN looked into how diamonds were being used to buy weapons in Angola.
In 1999, De Beers Group stopped buying diamonds from outside sources. This was to make sure that all their diamonds were conflict-free, meaning they did not fund wars. This change took effect on March 26, 2000.
In December 2000, the UN supported the idea of an international system to certify rough diamonds. By November 2002, governments, the diamond industry (led by De Beers), and other organizations created the Kimberley Process Certification Scheme (KPCS). This scheme sets rules for controlling the production and trade of rough diamonds and started in 2003.
De Beers states that all the diamonds they sell are conflict-free. They say that all their diamonds follow national laws, the Kimberley Process, and their own good practices. The Kimberley Process has helped improve the reputation of the diamond industry.
In 2018, De Beers used blockchain technology to track 100 valuable diamonds. They tracked these diamonds from the mine to the store to ensure their quality and that they were conflict-free.
In 2019, they launched their own tracking system called Tracr. This system allows all diamonds to be identified and traced as they move from the mine to the store. Other companies like Signet and Alrosa are also using this technology.
Corporate Affairs
In August 2017, De Beers partnered with the Stanford Graduate School of Business. This partnership aims to help new businesses in Botswana, Namibia, and South Africa grow faster. The program teaches young entrepreneurs how to turn their business ideas into reality. This is a three-year, $3 million deal.
In September 2017, De Beers teamed up with UN Women to help women advance within the company and in the countries where it operates. In 2018, they started a program to support 500 women who run small businesses in communities near De Beers's Venetia diamond mine.
In May 2018, De Beers's group company Element Six launched a brand to sell lab-grown diamonds directly to customers.
Images for kids
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DeBeers store on Rodeo Drive in Beverly Hills, California - 2008
See also
- Blood diamond
- Canadian diamonds
- List of diamonds
- Synthetic diamond
