De Beer’s International Diamond Monopoly

De Beer’s International Diamond Monopoly

Company overview

De Beers Consolidated mines was formed in 1888 in South Africa from the merger between the companies of Barney Banato and Cecil Rhodes. The new entity was the only one to have diamond mining operations in the country. One year later, Rhodes signed an agreement with the London-based diamong syndicate in which the former agreed to buy a fixed amount of diamonds per year at an agreed price, thus, keeping under control both the output of diamonds and their price (Wikipedia, Accessed March 09).

The Diamond Trading Company, De Beers Group’s distribution arm is sorting, valuing and selling approximately 40% of the world’s rough diamonds from the value point-of-view. The De Beers Group has either joint-ventures or wholly-owned interests in South Africa, Bostwana, Namibia and United Kingdom and has shops in many other countries, except in United States. This last market, despite being the second largest in the world as size (Associated Press, 2004), is one in which De Beers sells its diamonds through intermediaries since the World War II, which corresponds to the moment the company it was charged for the first time with price fixing. In 2004, the diamond seller was fined $10 million in Columbus, Ohio as part of an agreement that resumed the company’s selling activity directly in the U.S. market. However, this wasn’t the first charge the company was brought in the U.S. In 1994, De Beers was charged along with GE for keeping diamond prices artificially high at a worldwide level. The charges were dismissed as the U.S. courts didn’t have the jurisdiction outside the U.S. And De Beers is headquartered in South Africa.

The monopoly model the company adopted ended in the early 2000, when producers from different countries, such as Russia and Canada started distributing their diamonds outside the De Beers channel. Today, the business model includes social responsibility. The diamond giant has business interests in Bostwana, where its activities account for approximately 1/3 of the country’s GDP (Nocera, 2008). Corporate social responsibility include activities, such as building infrastructure or increasing awareness regarding HIV. The new business approach is also meant to detach the company’s image from the armed conflicts generated by this industry.

Monopoly status

In 1990, De Beers’ diamond inventory was evaluated at $5bn and at that point in time the company was distributing roughly 80% of the world output of diamonds, being the undeniable market leader of the industy and also an “unapologetic monopolist” (Nocera, 2008), whose purpose was to maintain the price of diamonds high by controlling the supply. The company had offices in a large number of African countries, which generate most of the diamond output, thus enabling the monolopy to collect almost all the stones as they were mines. Some of these stones were later sold to diamond retailers just enough to meet a small part of the demand. According to Porter et. al. (2007), the world demand for diamond was in excess 1.2bn carats in 2000, which corresponds to more than 10 times the production of natural diamonds (Olson, 2002). The practice of buying inventory and selling only a small part of it had a major effect on world supply, this later one being kept to a very small level. The strong, intense marketing activity meant to associate diamonds with something small and precious stimulated an artificial demand for these stones. In 1947, the company lauched one of the most famous advertising slogans ever “A diamond is forever.” The slogan was meant to revive the declining American market.

The overall effect of stockpilling $5bn worth of diamonds and of manipulating the laws of supply and demand was an artificially high price, created by a manipulated perception that diamonds are rare products that should be expensive.

De Beers’ monopolisting power caused civil wars in the producing countries, as the company was continually buying diamonds as they were mined and all the money cashed for the rocks was used to finance arms for rebels. The company’s involvement in armed conflicts happened as it was trying to control the supply of diamonds, thus buying them from any group that was selling them, including here RU, UNITA or any other rebel group that was fighting with the Democratic Republic of Congo (Smith, 2003). According to Smith (2003), in 1996 and 1997, about one fifth of De Beers diamonds were Angolan and UNITA, the rebel group whom the company was dealing with, was controlling roughly 70% of the country’s production. The Democratic Republic of Congo and Angola are among the most well-known African countries in which the diamonds industry financed and provoked major armed conflicts.

The report called “A Rough Trade: The Role of Companies in the Angolan Conflict,” issued in 1998 by the British human rights organization Global Witness, accused De Beers to have bought diamonds from the rebel group UNITA in order to maintain market stability or better said to maintain the prices hig by controlling the supply. The company’s immediate reaction was to deny any allegations. However, one year later four other human rights organizations joined Global Witness efforts and together they launched the “Fatal Transactions Campaign,” whose goal was to raise awareness on how diamonds affect the life in Africa. As short as two days after the campaign was launched, De Beers publicly announced an embargo on Angolan diamonds and soon after it declared the end trade with outside markets. Thus, the company was able to guarantee that their diamonds are conflict-free.

In the 1990, companies that were part of the De Beers cartel and exploring maintly outside Africa slowly renounced collaboring with this group and sold the diamonds outside of this, thus breaking the cartel. Additionally, in the early 2000, the diamond industry was lagging behind the luxury goods industry, which determined the company to change its strategy. The strategy included highlithing social challenges and a focus on innovation.

Relation to Christianity

In 2000, a document called the Fowler Report was issued by a body of UN experts, implicating “two current African presidents as well as the government of Bulgaria and the world’s largest diamond exchange, in Antwerp, Belgium, in the methods that rebels have used to smuggle Angolan diamonds out for sale, enabling them to buy weapons to sustain decades of civil war” (Crossette, 2000). Two months later, South Africa’s Ministry of Minerals opened the so called Kimberley Process, whose name comes from one of De Beers’ first mines. During this process, governments of various countries agreed upon an international certification scheme that would guarantee that diamonds imported with this certification would be conflict-free. The reasoning behind this approach was that the prohibition of uncertified diamonds would cut-off the major finance source for arms for the rebels in the producing countries.

Nowadays, De Beers’ business conduct follows the so called best practice principles. These principles implies that both De Beers and the companies they work with comply with a number of standards regarding three main areas: business, social and environmental responsabilities (De Beers corporate website, Accessed March 09). The business responsabilities refer to all operations, which have to act responsably and according to the law. The social responsabilities suggest that the company should generate real social value for the communities they work in. Finally, the environment responsabilities ensure that the company’s operations are in accordance with environmental standards.

Christianity, or any religion for that matter, can be seen as a monopoly. A church can be seen as a firm that markets the trust in God. Consumers’ acceptance of the church’s products or services depends on its reliability, which means that the church has to protect its brand name and avoid any activity that might serve as evidence of its dishonesty or insincerity. if, hipothetically speaking, one church (say the Christian one) would achieve monopoly, the potential entrants would be subject to harsh penalties, plus the church would behave like a typical monopolist and equate marginal revenue to marginal cost to reap of monopoly profits (e.g. pay money for the salvation of your soul). Finally, consumers are forbidden from choosing the least cost option, which should damage the individual welfare.


The case of De Beers, probably the largest diamond marketer ever shows the world how the monopolies can use their power to generate conflicts in undemocratic coutries if it’s within their reach to do so. It also shows the world that once awareness is raised regarding the gravity of such actions, monopoly power can be restriction or even eliminated.

Diamonds are still perceived as luxury products and they still serve as a means to finance arms for rebel forces in many poor countries because nowadays the diamond industry is not dominated by one company, but by many and not all of them comply with the certification rules that ensure that diamonds come from conflict-free areas. Many diamond merchants are either ignorant or careless regarding the origin of the diamonds they sell and with or without knowledge they finance and thus perpetuate conflicts in poor countries.

The most significant action against the so called “blood diamonds” was the Kimberley process in which certification standards have been defined and adopted by many diamond importing countries to prevent the financing of armed conflicts with diamond money. This process, however, should be enriched with additions that would turn it into a fair international scheme and enforced by additional bodies.

Reference List

Associated Press. 2004. De Beers Pleads Guilty in Price Fixing Case. July 13th edition,

Crossette, B. 2000. Report on Angola Sanctions is Challenged in the UN. The New York Times, March 16th Edition,

De Beers corporate website, Accessed March 09,

Global Witness. 1998. A Rough Trade: The Role of Companies in the Angolan Conflict.

Nocera, J. 2008. Diamonds are Forever in Bostwana. The New York Times, August 8th Edition,

Olson, D.W. 2002. U.S. Geological Survey. Mineral Commodity Summaries,

Porter, M., Marciano, S. And Warhurst, a. 2007. De Beers: Addressing the New Competitiveness Challenges. Harvard Business School, Case study: 9-706-501.

Smith, J. 2003. Conflict Diamonds: Resolving Africa’s Worst Resource Wars. Stanford – Program in Writing and Rhetoric.

United Nations. 2000. Fowler Report – Final Report of the UN Panel of Experts on Violations of Security Council Sanctions Against Unita.

Wikipedia, Accessed March 09,


Get Professional Assignment Help Cheaply

Buy Custom Essay

Are you busy and do not have time to handle your assignment? Are you scared that your paper will not make the grade? Do you have responsibilities that may hinder you from turning in your assignment on time? Are you tired and can barely handle your assignment? Are your grades inconsistent?

Whichever your reason is, it is valid! You can get professional academic help from our service at affordable rates. We have a team of professional academic writers who can handle all your assignments.

Why Choose Our Academic Writing Service?

  • Plagiarism free papers
  • Timely delivery
  • Any deadline
  • Skilled, Experienced Native English Writers
  • Subject-relevant academic writer
  • Adherence to paper instructions
  • Ability to tackle bulk assignments
  • Reasonable prices
  • 24/7 Customer Support
  • Get superb grades consistently

Online Academic Help With Different Subjects


Students barely have time to read. We got you! Have your literature essay or book review written without having the hassle of reading the book. You can get your literature paper custom-written for you by our literature specialists.


Do you struggle with finance? No need to torture yourself if finance is not your cup of tea. You can order your finance paper from our academic writing service and get 100% original work from competent finance experts.

Computer science

Computer science is a tough subject. Fortunately, our computer science experts are up to the match. No need to stress and have sleepless nights. Our academic writers will tackle all your computer science assignments and deliver them on time. Let us handle all your python, java, ruby, JavaScript, php , C+ assignments!


While psychology may be an interesting subject, you may lack sufficient time to handle your assignments. Don’t despair; by using our academic writing service, you can be assured of perfect grades. Moreover, your grades will be consistent.


Engineering is quite a demanding subject. Students face a lot of pressure and barely have enough time to do what they love to do. Our academic writing service got you covered! Our engineering specialists follow the paper instructions and ensure timely delivery of the paper.


In the nursing course, you may have difficulties with literature reviews, annotated bibliographies, critical essays, and other assignments. Our nursing assignment writers will offer you professional nursing paper help at low prices.


Truth be told, sociology papers can be quite exhausting. Our academic writing service relieves you of fatigue, pressure, and stress. You can relax and have peace of mind as our academic writers handle your sociology assignment.


We take pride in having some of the best business writers in the industry. Our business writers have a lot of experience in the field. They are reliable, and you can be assured of a high-grade paper. They are able to handle business papers of any subject, length, deadline, and difficulty!


We boast of having some of the most experienced statistics experts in the industry. Our statistics experts have diverse skills, expertise, and knowledge to handle any kind of assignment. They have access to all kinds of software to get your assignment done.


Writing a law essay may prove to be an insurmountable obstacle, especially when you need to know the peculiarities of the legislative framework. Take advantage of our top-notch law specialists and get superb grades and 100% satisfaction.

What discipline/subjects do you deal in?

We have highlighted some of the most popular subjects we handle above. Those are just a tip of the iceberg. We deal in all academic disciplines since our writers are as diverse. They have been drawn from across all disciplines, and orders are assigned to those writers believed to be the best in the field. In a nutshell, there is no task we cannot handle; all you need to do is place your order with us. As long as your instructions are clear, just trust we shall deliver irrespective of the discipline.

Are your writers competent enough to handle my paper?

Our essay writers are graduates with bachelor's, masters, Ph.D., and doctorate degrees in various subjects. The minimum requirement to be an essay writer with our essay writing service is to have a college degree. All our academic writers have a minimum of two years of academic writing. We have a stringent recruitment process to ensure that we get only the most competent essay writers in the industry. We also ensure that the writers are handsomely compensated for their value. The majority of our writers are native English speakers. As such, the fluency of language and grammar is impeccable.

What if I don’t like the paper?

There is a very low likelihood that you won’t like the paper.

Reasons being:

  • When assigning your order, we match the paper’s discipline with the writer’s field/specialization. Since all our writers are graduates, we match the paper’s subject with the field the writer studied. For instance, if it’s a nursing paper, only a nursing graduate and writer will handle it. Furthermore, all our writers have academic writing experience and top-notch research skills.
  • We have a quality assurance that reviews the paper before it gets to you. As such, we ensure that you get a paper that meets the required standard and will most definitely make the grade.

In the event that you don’t like your paper:

  • The writer will revise the paper up to your pleasing. You have unlimited revisions. You simply need to highlight what specifically you don’t like about the paper, and the writer will make the amendments. The paper will be revised until you are satisfied. Revisions are free of charge
  • We will have a different writer write the paper from scratch.
  • Last resort, if the above does not work, we will refund your money.

Will the professor find out I didn’t write the paper myself?

Not at all. All papers are written from scratch. There is no way your tutor or instructor will realize that you did not write the paper yourself. In fact, we recommend using our assignment help services for consistent results.

What if the paper is plagiarized?

We check all papers for plagiarism before we submit them. We use powerful plagiarism checking software such as SafeAssign, LopesWrite, and Turnitin. We also upload the plagiarism report so that you can review it. We understand that plagiarism is academic suicide. We would not take the risk of submitting plagiarized work and jeopardize your academic journey. Furthermore, we do not sell or use prewritten papers, and each paper is written from scratch.

When will I get my paper?

You determine when you get the paper by setting the deadline when placing the order. All papers are delivered within the deadline. We are well aware that we operate in a time-sensitive industry. As such, we have laid out strategies to ensure that the client receives the paper on time and they never miss the deadline. We understand that papers that are submitted late have some points deducted. We do not want you to miss any points due to late submission. We work on beating deadlines by huge margins in order to ensure that you have ample time to review the paper before you submit it.

Will anyone find out that I used your services?

We have a privacy and confidentiality policy that guides our work. We NEVER share any customer information with third parties. Noone will ever know that you used our assignment help services. It’s only between you and us. We are bound by our policies to protect the customer’s identity and information. All your information, such as your names, phone number, email, order information, and so on, are protected. We have robust security systems that ensure that your data is protected. Hacking our systems is close to impossible, and it has never happened.

How our Assignment  Help Service Works

1.      Place an order

You fill all the paper instructions in the order form. Make sure you include all the helpful materials so that our academic writers can deliver the perfect paper. It will also help to eliminate unnecessary revisions.

2.      Pay for the order

Proceed to pay for the paper so that it can be assigned to one of our expert academic writers. The paper subject is matched with the writer’s area of specialization.

3.      Track the progress

You communicate with the writer and know about the progress of the paper. The client can ask the writer for drafts of the paper. The client can upload extra material and include additional instructions from the lecturer. Receive a paper.

4.      Download the paper

The paper is sent to your email and uploaded to your personal account. You also get a plagiarism report attached to your paper.

smile and order essaysmile and order essay PLACE THIS ORDER OR A SIMILAR ORDER WITH US TODAY AND GET A PERFECT SCORE!!!

order custom essay paper