De Beers Jewellery

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Topics: Diamond, De Beers, Africa
Case Introduction

De Beers, the so-called cartel in the jewellery industry, is a company that dominates diamond industry. The core operational of De Beers includes diamond mining, diamond shops, diamond trading and industrial diamond manufacturing sectors. De Beers is active in every category of industrial diamond mining: open-pit, underground, large-scale alluvial, coastal and deep sea. The company’s headquarter located in Johannesburg, South Africa. As the vertically integrated diamonds producer, De Beers also controls the power of supply to its ‘sight holders’. The group owns and operates mines in Canada has gained 26% interest in South African mines through its partners, operates in more than 20 countries across six continents. Areas of focus are in Botswana, Angola, India, Canada and RSA (South Africa). As the year 2000, the company remained the world’s leading diamond producer and distributor with extensive activities in the value chain of exploration, mining and distribution of rough stones as well as significant influence in processing, manufacturing and marketing.

History of De Beers:

Cecil Rhodes Era

Founder of De Bees, Cecil Rhodes started the company by renting water pumps to diggers with flooded claims during the diamond rush in 1871. He seized opportunities to purchase and consolidate claims and later entre mines. Among the rights he purchased was the right to mine the De Beers brother’s farm, whose name became the name if his company. Rhodes used his market position and access to credit to engineer a merger with Barney Barnato (who managed to obtain a large stake in Kimberly’s biggest mine), in 1888 to form De Beers Consolidated Mines. De beers controlled close to 100% of South African diamond output and 90% of world diamond output. Its position was so formidable that when the company reduced production in 1888, rough-stone process quickly rose by 50%. By 1893, Rhodes had established a single buyer, the Diamond

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