De Beers was founded by Cecil Rhodes in 1888 and formed through a merger between Rhodes and Barney Barnato, two of the most celebrated personalities in the diamond industry. The term “De Beers” comes from the names of the two brothers—Johannes Nicolaas De Beer and DiederikArnoldus De Beer—who co-owned the farmland that produced most of the diamonds during this time.
Before the establishment of De Beers, Cecil Rhodes had already founded the British South Africa Company. The main objective of BSAC was to consolidate the mineral wealth of Mashonaland. The discovery of diamonds, such as the Star of South Africa in 1869, boosted the fortunes of BSAC immensely. Cecil Rhodes would sell such diamonds and plow back the profits to his company. When he founded De Beers around a decade later, Rhodes was already a name to reckon with in the global diamond industry.
In 1926, De Beers cemented their place as the world’s largest diamond explorer and trader and sought collaborations with enterprising executives from other blue-chip diamond firms. De Beers appointed one Ernest Oppenheimer to their board, and in the same year, the corporation became a global monopoly in diamond production. However, the company’s success under the stewardship of Oppenheimer was not short of controversies. De Beers was censored during his tenure for price-fixing and other forms of high-handedness.
Important Milestones in the History of the De Beers Group
1902: Cecil Rhodes dies, leaving behind a company that enjoys over 90% of the global diamond trade. However, a rival mine, Cullinan, is established in the Kimberley.
Contrary to expectations, the owner of this mine refuses to collaborate with De Beers. Instead, he trades his diamonds with the Oppenheimer brothers, who have become independent.
1905 to 1907: The Cullinan mine produces the world’s most significant piece of rough diamond, aptly named Cullinan. In 1907, this diamond was cut by the Asscher Brothers and offered to King Edward VII on his birthday.
1914 to 1918: As the First World War rages, diamond companies seek more alliances and mergers. For the first time, the Cullinan mine falls under the management of De Beers.
1927: Ernest Oppenheimer is appointed the chair of De Beers. Oppenheimer secures the job due to his membership on the company’s board and the fact that he is already a significant shareholder. He brings in a wealth of experience that helps spur the growth of De Beers. However, Oppenheimer faces frequent accusations of fostering dishonest industry practices.
The 1930s: The Great Depression heralds the closure of several De Beers diamond mines. As global diamond prices plummet, the company finds it hard to sustain its production activities. Smaller mines are affected the most.
1947: While other global corporations are still entangled in the aftermath of the Great Depression, De Beers is already picking up the pieces in earnest. Besides diamond production, the firm now also embarks on rigorous marketing campaigns. Primarily, the corporation targets members of the higher social classes. The campaigns are a tremendous success because people now no longer view diamonds only as a measure of wealth but also as a store of sentimental value. The year sees the coining of phrases like “A Diamond is Forever.” The diamond trade became big business once again, thanks to the efforts of De Beers.
The 1960s through to the 1970s: De Beers tries to penetrate the elusive US diamond market but faces severe challenges. During World War One, Admiral Stansfield Turner, the former CIA chief, had accused the company of restricting the country’s access to industrial diamonds. According to Mr. Turner, those restrictions nearly hampered the US’ military prospects. Resultantly, De Beers is struggling to win the favor of the rather hard-lining American politicians and industrialists. De Beers would penetrate the US and all major diamond markets through persistence and resilience.