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DeBeers are probably the most well known diamond miners and producers on the planet and they have probably influence the price of diamonds more than any other company.

The DeBeers group of companies is based in Johannesburg in South Africa and has been synonymous with Diamonds for over a century.

History of DeBeersIt was founded by Cecil John Rhodes and Charles Dunell Rudd in 1888. In the 20th Century the Oppenheimer family became the major shareholders and with Sir Earnest Oppenheimer and his Son Harry and grandson Nicky all being Chairmen of the company at one time or another.

DeBeers, these days, is a collection of companies. They are, collectively responsible for around 40% of the worlds diamond production by value.

De Beers is active in every category of diamond production from the mining of diamonds right through to sales to retail and online with the DeBeers chain of outlets.

DeBeers MiningAccording to Wikipedia, "De Beers Mining takes place in Botswana, Namibia, South Africa and Tanzania. Mining in Botswana takes place through the mining company Debswana, a 50-50 joint venture with the government of Botswana. In Namibia it takes place through Namdeb,a 50-50 joint venture with the government of Namibia. Mining in South Africa mining takes place through De Beers Consolidated Mines (DBCM), a partnership with the broad based black economic empowerment partner, Ponahalo Investments. In Tanzania it occurs through a partnership with the government of Tanzania, 75% owned by De Beers, 25% by government. In 2007, De Beers is expected to open its first mine in Canada (called "Snap Lake", located in Canada's North West Territories)."

DeBeers Sales and MarketingDeBeers has it's own sales and marketing arm. This is a company called the Diamond Trading Company (the DTC). DeBeers sells almost half of the worlds rough diamonds through this marketing arm.

This is almost half of the world rough diamond (rough diamond are those from the mine and before they are polished for sale to jewelry manufacturers and diamond dealers around the world).

However this include diamonds produced by the Russian company, Alrosa, which DeBeers has an agreement. That agreement is due to expire at the end of 2009, unless of course it is renewed. If it is not then Alrosa will become a direct competitor to DeBeers.

The rough diamonds sold by DeBeers through their arm, DTC, are purchased by the world's leading diamantaires known as Sightholders. Sightholders buy tailored assortments or "parcels" of rough diamonds from a blended "mix" of diamonds from the various mines. These clients are chosen following assessment against a set of objective selection criteria according to their ability to add value to diamonds as well as their audited adherence to the DTC's Diamond Best Practice Principles, which cover business ethics, the Kimberley Process Certification Scheme and the industry's System of Warranties, labour standards, health and safety as well as environment. De Beers have actively promoted diamonds as being symbolic of eternity and love, and therefore the ideal jewel for an engagement or wedding ring. Their famously successful advertising campaigns have included such measures as, showing diamonds as wedding gifts in popular romance films, publishing stories in magazines and newspapers which would emphasize the romantic value of diamonds and associate them with celebrities, employing fashion designers and other trendsetters to promote the trend on radio and, later, television and even enlisting the British Royal Family to directly promote diamonds.

The slogan "A Diamond is Forever," invented by N. W. Ayer, is one of the most successful slogans in marketing history. Its purpose is to ensure women are dissuaded from selling the diamonds they have received and thereby preventing a secondary market. The result of this is that retailers sell diamonds at a high price without any competition from a secondary market, and it also allows De Beers to maintain control of the diamond trade at wholesale level.

The company has enjoyed a near monopoly on the diamond industry for many years until discoveries of diamond deposits outside of DeBeers control reduced their world share to around 60%.

Potted History (From Fin24)Sir Ernest Oppenheimer was, by all accounts, a man not to be messed with. He was born in Freiberg, Germany, to a cigar merchant, and found himself in London at the age of 17 working in a diamond brokerage house. Dunkelsbuhler & Company liked what they saw in the boy, who was a hard worker and a pugilist by nature. They sent him to South Africa, to the embankments of the Kimberley Hole to represent them. Sadly for them, he wasn't interested in representing anyone but himself. He looked around, and set off to find the biggest guy in town from whom to wrest a company. That fellow was Cecil John Rhodes.

In 1902, diamonds were discovered in a rich pipe of kimberlite that came to be called Cullinan. The resultant mine and its owner, Sir Thomas Cullinan, were different, mostly because they refused to sell to the reigning cartel, a little company called De Beers Consolidated Mines. De Beers was lorded over by Cecil John Rhodes, who effectively ran the diamond industry as a personal fiefdom, controlling 90% of the market. Rhodes was backed by the Rothschild family, and the company originally represented a consortium of Rhodes and Barney Barnato's holdings. Over the years, the company created the diamond brand, fixing prices to such an extent that something with no value, outside of specific industries like glass cutting, became a sound investment and a luxury product.

It so happened that Cullinan Mine started digging up their own shiny baubles, shunning De Beers for Ernie Oppenheimer, late of Dunkelsbuhler & Company. De Beers viewed this as an unwelcome development, and it indeed signaled the beginning of the end of the company's first era. For Cullinan soon equaled De Beers in production and, adding insult to injury, in 1905 (three years after Rhodes' death) mined the biggest rough stone ever found. The Cullinan Diamond in its uncut form weighed 3106 carats, over half a kilogram. This was serious bling, which today might have found its way into L'il Wayne' teeth, but was then chopped into the Great Star of Africa, and used to tart up His Majesty's royal appurtenances.

Ernest Oppenheimer's wealth and power shot into the stratosphere. In 1917, he started up the Anglo American Corporation, backed by J.P. Morgan. Ten years later, after buying himself a seat on the board of De Beers, he put Cecil John Rhodes' remaining legacy in a chokehold, and squeezed until it cried "Uncle."

Ernest Oppenheimer; Harry Oppenheimer

That, in a nutshell, is how Oppenheimer came to own one of this country's emblematic companies. Once under the Oppenheimer ambit, De Beers really started getting nasty. The CIA made an unsubstantiated complaint that Oppenheimer restricted rough diamond sales to the United States during World War II. Every other diamond producer was forced to sell their goods through the De Beers channel. If they refused, De Beers simply flooded the market with their product, duly sinking them. The company was notorious for purchasing and stockpiling diamonds, trickling them into the market in order to control prices. The diamond industry was a genuine cartel, run by one company, dominated by one family. When Frances Gerety of N.W. Ayer and Son coined the phrase "A Diamond is Forever," it was game over. De Beers and diamonds became synonymous.

It had to end, and it did. By the year 2000, De Beers were reduced to owning 40 percent of the market. Their cartel had been smashed by developers in Russia, China and Canada. They were now in bed with the Namibian government for 50 percent of Namdeb, and the Botswana government for 50 percent of Debswana. And yet, they still dominated, if not in terms of market share, then by a form of Spock-like mind control over their contemporaries in the industry.

Artificial Development of DiamondsRecent techniques for creating high quality real diamonds in a laboratory setting have become a threat to the pricing of natural diamonds. DeBeers has decided to defend their market by taking the following actions:

A marketing campaign will be aimed at convincing potential customers that laboratory diamonds are "fake" (even though they are real diamonds, and potentially may be of higher quality than natural diamonds).

All natural diamonds will be imprinted with a serial number and registered, to prevent laboratory diamonds from being sold as natural diamonds.

Kimberley ProcessAccording to DeBeers, "Every diamond in De Beers Diamond Jewellery is conflict-free and child labor free. De Beers is aware of the problem of conflict diamonds and has taken measures to guarantee that no conflict diamonds enter its supply chain or its jewellery. "

DeBeers participates in the Kimberley process. See Kimberley process Certification Scheme .

The World Diamond Council has worked successfully with the United Nations, governments and groups such as Global Witness and Partnership Africa Canada to introduce a system for the certification of the source of uncut diamonds to prevent the trade in conflict diamonds. This system, known as the Kimberley Process Certification Scheme (KPCS), was formally adopted in November 2002, and came into operation on January 1, 2003. Andrew Coxon, President of the De Beers Institute of Diamonds, is a founding member of the World Diamond Council and spearheaded this initiative on behalf of the diamond industry.

How Does the Kimberley Process Work?The KPCS requires participating governments to ensure that each shipment of rough diamonds exported be in a secure container and accompanied by a uniquely numbered, government-validated certificate stating that the diamonds are conflict-free. Over 45 countries participate, representing all the nations with significant involvement in the diamond trade. All 45 importing countries agree not to accept any rough diamonds without an approved Kimberley Process Certificate.

DeBeers Diamond stated policy is that:

"Every diamond in De Beers Diamond Jewellery is conflict-free and child labor free."

"De Beers is aware of the problem of conflict diamonds and has taken measures to guarantee that no conflict diamonds enter its supply chain or its jewellery."

Thanks in great part to international cooperation between governments, the diamond industry, retail jewelers and non-government organizations such as Global Witness and Partnership Africa Canada, vast improvements have been made in the fight against conflict diamonds. However one diamond used to fund conflict is one too many, and continued vigilance is essential.

What is A Conflict Diamond?Conflict diamonds are rough, uncut diamonds used by rebel movements or their allies to finance armed conflict aimed at undermining legitimate governments. In 1998 the Non-government Organization (NGO) Global Witness brought to the world's attention the fact that rebel groups were funding their war against the legitimate government in this way.

What is De Beers Doing To Prevent the Use of Conflict Diamonds in De Beers Jewellery?The De Beers Group state they have been working with governments through the United Nations and other international organizations to ensure that future conflicts cannot be funded in this way, and the De Beers Group was instrumental in creating the World Diamond Council to represent the international diamond and jewellery industry in the Kimberley Process.

"We believe the injury and hardship suffered by any local population when conflicts arise in diamond producing areas is unacceptable. We believe that seeking to profit from conflicts in diamond producing areas is also unacceptable, and we are committed to taking action to address concerns arising out of the misuse of rough diamonds: De Beers polished diamonds and De Beers jewellery are only available at De Beers Stores, and De Beers purchases diamonds only from suppliers that adhere to the Kimberley Process Certification Scheme and the System of Warranties.

The System of Warranties was developed by the World Diamond Council (WDC) representing the entire spectrum of the industry from mining houses to retail jewelers. Its principal element is the requirement for a declaration on the invoice accompanying every transaction of rough diamonds, polished diamonds and diamond jewellery that declares that the diamonds are 'not involved in funding conflict and are in compliance with United Nations resolutions'. These warranties and declarations are subject to audit and oversight by the relevant national authorities.

Under the provisions of the Kimberley Process, mandated by the United Nations, endorsed by the Security Council and enshrined in the national law of all participating countries De Beers, and all other members of the industry, are obliged to trade only with sellers that use the System of Warranties.

We have informed all our trade diamond suppliers in writing that we require them to supply De Beers exclusively with merchandise that complies with the Kimberley Process, which obliges them to issue the following guarantee in writing:

"The diamonds herein invoiced have been purchased from legitimate sources that are not involved in funding conflict and are in compliance with United Nations resolutions. The seller hereby guarantees that these diamonds are conflict free based on personal knowledge and/or written guarantee provided by the supplier of these diamonds."

So when you buy diamonds there is a good chance that it is going to be a DeBeers diamond.

Some information obtained from Fin24