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==External links==
==External links==
* [http://www.debeersgroup.com De Beers]
* [http://www.debeersgroup.com De Beers]
* [http://www.eurostardiamond.com Eurostardiamond, a De Beers Sightholder company]
* [http://www.eurostardiamond.com Eurostar Diamond Traders, a De Beers Sightholder company]
* [http://www.eurostardiamond.com/consumer/diamond_best_practices.html De Beers Diamond Best Practice Principles - Integrity Throughout the Diamond Pipeline](Source: Eurostar Diamonds International)
* [http://www.eurostardiamond.com/consumer/diamond_best_practices.html De Beers Diamond Best Practice Principles - Integrity Throughout the Diamond Pipeline](Source: Eurostar Diamonds International)
* [http://www.forevermark.com Forevermark]
* [http://www.forevermark.com Forevermark]

Revision as of 11:12, 30 November 2007

De Beers
Company typePrivately held company
Industryexploration and mining of diamonds
Founded1888
FounderCecil Rhodes
Headquarters
Johannesburg
,
South Africa
Area served
Worldwide
Key people
Nicky Oppenheimer, Chairman

Gareth Penny, Managing Director
ProductsDiamonds
ServicesDiamond marketing and promotion. Community development.
RevenueIncrease US $6.5 billion (2005)
Increase US $554 million (2005)
Number of employees
22,936
Websitewww.debeersgroup.com

De Beers, founded by Cecil Rhodes, comprises companies involved in rough diamond exploration, diamond mining and diamond trading. The various companies within the De Beers “family of companies” are responsible for around 40% of world diamond production by value.[1]

De Beers is active in every category of diamond mining: open-pit, underground, large-scale alluvial, coastal and deep sea. De Beers is not involved in informal small-scale diamond mining, which is rarely economical for large mining companies.

De Beers has a presence in 25 countries, largely on account of its extensive exploration activities. Mining takes place in Botswana, Namibia, South Africa and Tanzania. Mining in Botswana takes place through the mining company Debswana,[2] a 50-50 joint venture with the government of Botswana. In Namibia it takes place through Namdeb,[3] a 50-50 joint venture with the government of Namibia. Mining in South Africa mining takes place through De Beers Consolidated Mines (DBCM),[4] 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).

The sales and marketing arm of De Beers is a company called the Diamond Trading Company (the DTC).[5] This company sells almost half of the world’s rough diamonds by value. Other diamonds sold through the DTC include those purchased from the Russian diamond mining company Alrosa[6]), although that relationship is due to end in 2009 after a ruling by the European Commission, the EU's anti-trust watchdog, effectively establishing Alrosa as a direct competitor to De Beers from that time[7]. The DTC also creates and develops marketing programmes to stimulate interest in, and demand for, diamonds and diamond jewellery.

The rough diamonds sold by the DTC are purchased by a group of the world’s leading diamantaires known as Sightholders.[8] Sightholders buy tailored assortments of rough diamonds from a blended (or aggregated) “mix” of diamonds from the different 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,.[9][10] which cover business ethics, the Kimberley Process Certification Scheme[11] and the industry’s System of Warranties,[12] labour standards, health and safety as well as environment.


Business structure

De Beers Investments is the privately held, ownership company of De Beers Societe Anonyme (DBSA), and is registered in Luxembourg.[13][14] It is made up of three shareholdings; Anglo American plc has a 45% shareholding,[15] Central Investments DBI has a 45% shareholding, and the Debswana Diamond Company (Pty) Limited group owns 10% directly. The Debswana group also has an 11% shareholding in Central Investments DBI, which produces an effective ownership in De Beers Investments of 14.9%.[16][1][17]

De Beers Societe Anonyme (DBSA) is the management company of the De Beers group. It is owner of De Beers Consolidated Mines (DBCM), De Beers Centenary AG. De Beers Centenary has an equal share with the Government of Namibia in Namdeb[18]

Marketing

Promotional campaigns

De Beers (through its sales and marketing arm, the DTC) has been very successful in increasing desire for diamonds. The famous advertising line "A Diamond is Forever" (attempting to discourage diamond owners from putting their older diamonds onto the secondary market, thus limiting competition) was coined in 1947 and the company has created many successful campaigns since then. One of the most effective of these has been recognizing the diamond as a symbol of love and commitment and therefore the ideal jewel for an engagement or wedding ring.

Some of the campaigns started by De Beers include the "eternity ring" (as a symbol of continuing affection and appreciation), the "trilogy" ring (representing the past, present and future of a relationship) and the "right hand ring" (bought and worn by women as a symbol of independence).

De Beers is also known for its television advertisements featuring silhouettes of people wearing diamonds, to the music of Palladio by Karl Jenkins.The company spends $150 million per year on advertising.

The King George VI & Queen Elizabeth Stakes is a Group 1 flat horse race in the United Kingdom for three-year-old and above thoroughbreds. From 1972 to 2006 the event was sponsored by De Beers, and in 1975 permission was given by Queen Elizabeth II for the word 'Diamond' to be included in the title and from 1975 to 2006 it was run as the "King George VI & Queen Elizabeth Diamond Stakes". De Beers commissioned a fabulous diamond trophy for the winner each year and was designed and hand-crafted by some of the best goldsmiths in Britain. London jeweler Jamie Martin was involved in the making of some of the prizeswww.jandcmartin.com.

Retail ventures

In 2001, De Beers entered into a joint venture with French luxury goods company Moet Hennessy Louis Vuitton[19] (LVMH) to establish an independently managed De Beers retail company.[20] The joint venture, called De Beers Diamond Jewellers Ltd, has a licence from the De Beers group to use the De Beers brand name in a retail environment. The first De Beers LV store opened in Piccadilly in London and there are now De Beers LV retail stores in the following locations:

Laboratory created synthetics

Since the 1950s, it has been possible to create synthetic diamonds in a laboratory. These laboratory created stones have since been used for many industrial purposes, such as for abrasives in heavy duty drilling. It is now also possible to produce laboratory created synthetics that are indistinguishable optically from mined diamonds even by professional vendors, making them suitable for jewelery. These are generally colored gems, but at least one company, Apollo Diamond, is offering colorless synthetics.[21]

As part of De Beers' "Gem Defensive Programme", The Diamond Trading Company has developed instruments, mainly for use by the trade and gemological laboratories, which according to DTC can detect all "treatments, synthetics and simulants." The DTC also funds educational programs about treatments that can change the appearance and other properties of diamonds, and lobbies for all diamond treatments and synthetics to be labeled as such. According to the DTC, these activities are undertaken in cooperation with leading trade bodies as a means of "ensuring full and accurate information is provided to consumers."[22][23]

Position on conflict diamonds

De Beers played a key role in selling conflict diamonds from global diamond conflict areas. De Beers policy in the 1990s, which applied to all of Africa, was only to buy those diamonds that were legitimately traded and that it believed were not used to fund rebel groups.[24] In 1999, in line with a new zero-tolerance policy, De Beers stopped all outside buying of diamonds in order to guarantee categorically the conflict-free status of De Beers diamonds.[24]

De Beers guarantees that 100% of the diamonds it now sells are conflict-free.[24] According to the company, all De Beers diamonds are purchased in compliance with national law, the Kimberley Process Certification Scheme[25] and its own Diamond Best Practice Principles.[9][10] De Beers is active in the Kimberley Process, which aims to eliminate conflict diamonds from world diamond flows, and the Diamond Development Initiative (DDI).[26] The DDI aims to address the political, social and economic challenges facing the small-scale informal diamond mining sector and to optimise the beneficial development impacts of small-scale formal diamond mining to diggers and their communities. It does this through promoting the development of sustainable business models supported by development projects.

In 2004, De Beers paid a $10 million fine to the United States Department of Justice to settle a 1994 charge that De Beers had conspired with General Electric to fix the price of industrial diamonds (i.e. diamonds used for industrial purposes such as abrasives on drills). General Electric had been to court to face the charges, but the case was thrown out for lack of evidence. De Beers did not appear in court, but ten years later paid $10 million to settle all outstanding charges.

In November 2005, De Beers announced that an agreement had been reached and a preliminary approval order issued to settle the majority of civil class action price fixing suits filed against the company in the United States. Since then, in March 2006, the three remaining civil class action suits were added to the November settlement agreement. This resulted in an overriding global settlement arrangement totaling US$295 million which has received preliminary court approval. This settlement does not involve any admission of liability on the part of De Beers but will bring an end to all outstanding class actions. De Beers continues to cooperate with the United States District Court for the District of New Jersey to seek resolution of this litigation.

As part of the class action settlement, De Beers offered injunctive relief, which includes a general commitment to comply with the antitrust laws of the United States, and a commitment not to engage in specific conduct with third party producers and Sightholders. Injunctive relief is a typical component of class action settlements in the United States.

In February 2006, it was announced that De Beers had voluntarily entered into legally binding commitments with the European Commission to cease purchasing rough diamonds from Alrosa as of 2009. In January 2007, the European Commission announced that it had rejected all outstanding complaints against the DTC's Supplier of Choice sales strategy.

Criticism

The diamond market is dominated by De Beers companies which were originally formed in South Africa by British owners. De Beers now owns about 70% of diamond mines in Africa. The De Beers “family of companies” collectively are responsible for around 40% of world diamond production by value.[27]

Debswana, a fifty-fifty partnership between De Beers and the government of Botswana, is the world's leading producer of diamonds by value (originally it was only 15% for government of Botswana). However, the supply of diamonds worldwide is controlled only by De Beers; the government of Botswana has nothing to do with it.

De Beers enjoys a monopoly in Botswana and almost virtual monopoly in diamond supply in the rest of the world. There are other diamond mines owned by small companies with less control on the market. None of the companies are owned by Africans.

De Beers currently holds a legal exemption in South Africa from the mandatory dust suppression method of spraying water when drilling, on the grounds that the dust in its mines is uniquely harmless. However, dust in a diamond mine can cut and scar the lungs of mineworkers. [28]

In August 2007 British charity War on Want published a report accusing De Beers parent company Anglo American of profiting from the abuse of people in the developing countries in which the company operates.[29]

References

  1. ^ a b Introduction and Profile De Beers website, accessed online February 11, 2007.
  2. ^ Operations: Introduction Debswana website, accessed February 11, 2007
  3. ^ Namdeb: Overview Namdeb website, accessed February 11, 2007
  4. ^ De Beers Consolidated Mines (DBCM)
  5. ^ Diamond Trading Company
  6. ^ Alrosa
  7. ^ [1]
  8. ^ Introducing DTC Sightholders Diamond Trading Company Sightholders website, accessed online February 11, 2007
  9. ^ a b DTC Diamond Best Practice Principles De Beers Group, accessed online February 11, 2007
  10. ^ a b Best Practice, in Pratice: Our Commitment to You Diamond Trading Company Sightholders website, accessed February 11, 2007
  11. ^ Kimberley Process: Maintaining the Diamond's Integrity Diamond Trading Company Sightholders website, accessed February 11, 2007
  12. ^ Kimberley Process Certification Scheme: Section IV - "Internal Controls: Principles of Industry Self-Regulation " Kimberley Process Website, accessed February 11, 2007
  13. ^ Directorate De Beers website, accessed online February 11, 2007
  14. ^ Corporate Governance De Beers website, accessed online February 11, 2007
  15. ^ History Anglo American website, accessed Februray 11, 2007
  16. ^ De Beers Eco-Minex International Co Ltd, Ulaanbaatar, accessed online February 11, 2007
  17. ^ Central Investments DBI MBendi website, accessed February 11, 2007
  18. ^ Namdeb Diamond Corporation (Pty) Ltd MBendi website, accessed February 11, 2007
  19. ^ LVMH - Moet Hennessy Louis Vuitton
  20. ^ De Beers plans war on synthetic gems (Times Online)
  21. ^ Apollo Diamond, accessed April 8, 2007. [2]
  22. ^ Davis, Joshua The New Diamond Age Wired, Issue 11.09, September 2003, accessed online February 11, 2007
  23. ^ Welbourn, Dr. Chris.; Fisher Dr. David De Beers' Research Yields HPHT Secrets Rapaport News, posted online May 6, 2002, accessed online February 11, 2007
  24. ^ a b c De Beers Group De Beers Report to Stakeholders 2005/6 - Ethics, "Conflict and Instability" De Beers Group, accessed online February 11, 2007
  25. ^ Kimberley Process
  26. ^ Diamond Development Initiative (DDI)
  27. ^ Introduction and Profile De Beers website, accessed online February 11, 2007.
  28. ^ GLITTER & GREED, The Secret World of the Diamond Cartel by Janine Roberts, ISBN 1-932857-60-5
  29. ^ Anglo American: The Alternative Report

See also

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