De Beers
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De Beers | |
---|---|
Type | Privately held company |
Founded | 1888 |
Founder | Cecil Rhodes |
Headquarters | Johannesburg, South Africa |
Area served | Worldwide |
Key people | Nicky Oppenheimer, Chairman Gareth Penny, Managing Director |
Industry | Exploration and mining of diamonds |
Products | Diamonds |
Services | Diamond marketing and promotion. Community development. |
Revenue | ▲ US $6.5 billion (2005) |
Net income | ▲ US $554 million (2005) |
Employees | 22,936 |
Website | [11] www.debeersgroup.com - De Beers Group official web site |
De Beers engages in exploration for diamonds, diamond mining and diamond trading (diamond (gemstone)). Founded by Cecil Rhodes, the various companies within the De Beers Family of Companies are responsible for around 40% of world diamond production by value.
De Beers is active in every category of diamond mining: open-pit, underground, large-scale alluvial, coastal and deep sea.[1]
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 the Republic of Botswana. In Namibia it takes place through Namdeb,[3] a 50-50 joint venture with the Government of the Republic of Namibia. Mining in South Africa 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 2008 De Beers will open 2 mines in Canada - Snap Lake and Victor.[5]
Contents |
[edit] Business structure
De Beers Investments is the privately held, ownership company of De Beers Societe Anonyme (DBSA), and is registered in Luxembourg. It is made up of three shareholdings; Anglo American plc has a 45% shareholding, Central Investments DBI has a 40% shareholding, and the Government of the Republic of Botswana owns 15% directly. De Beers Societe Anonyme (DBSA) is the management company of the De Beers group.[6]
[edit] The Diamond Trading Company
The Diamond Trading Company, the rough diamond sales and distribution arm of the De Beers Group, sorts, values and sells approximately 40% of the world’s rough diamonds by value. The DTC has a combination of wholly-owned and joint venture operations in South Africa (DTCSA), Botswana (DTCB), Namibia (NDTC and the United Kingdom (DTC).
The diamonds sold by the DTC are sourced primarily from De Beers’ own mining operations in South Africa and Canada, and through its joint venuture partnerships with the governments of Botswana, Namibia and Tanzania. Technicians in London, Kimberley, Windhoek and Gaborone sort these diamonds into approximately 12,000 different categories based on size, shape, quality and colour, for DTC Sightholders.[7]There are 79 Sightholder companies who buy the rough diamonds from the DTC and its partner offices. Sightholders travel to London, Kimberley, Gaborone and Windhoek ten times a year for their Sight.
DTC Sales in 2007 were $5.9bn.
The DTC develops diamond technology and operates a research and development facility based in the UK, to support the consistency of DTC rough diamond assortments for Sightholders and downstream industries in the DTC’s producer partner countries.
Sightholders are required to comply with the De Beers’s Best Practice Principles (BPP)s which set out various objective standards of conduct within three main areas: Business responsibilities; Social responsibilities; Environmental responsibilities. The BPPs ensure that the De Beers Family of Companies, Sightholders and applicable third parties operate to an ethical, legal, professional, social and environmental standard, including being committed to the Kimberley Process.[8]
In December 2000, the United Nations General Assembly adopted a landmark resolution supporting the creation of an international certification scheme for rough diamonds. By November 2002, negotiations between governments, the international diamond industry and civil society organisations resulted in the creation of the Kimberley Process Certification Scheme (KPCS). The KPCS sets out the requirements for controlling rough diamond production and trade. The KPCS became effective in 2003.
[edit] Marketing
[edit] Promotional campaigns
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De Beers has been very successful in increasing desire for diamonds. A young copywriter, Frances Gerety coined the famous advertising line "A Diamond is Forever" in 1947, allegedly while she was dreaming, and the company has created many successful campaigns since then. One of the most effective of these has been the marketing of diamonds as a symbol of love and commitment.
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 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 diamond trophy for the winner each year and was designed and hand-crafted by some of the best goldsmiths in Britain.
[edit] Retail ventures
In 2001, De Beers entered into a retail joint venture with French luxury goods company Louis Vuitton Moet Hennessy[9] (LVMH) to establish an independently managed De Beers diamond jewellery company. The joint venture, called De Beers Diamond Jewelers Ltd sells diamond jewellery. The first De Beers store opened on Old Bond Street in London and there are now De Beers retail stores in the following locations:
- London at Bond Street, Royal Exchange and Harrods
- Tokyo at Ginza, Nihonbashi, and Shinjuku
- Osaka at Shinsaibashi and Umeda
- New York City at Fifth Avenue
- Beverly Hills at Rodeo Drive
- Houston at The Galleria
- Paris at Le Printemps
- Las Vegas at The Forum Shops
- Dubai at Mall of the Emirates
- McLean, Virginia at Tysons Galleria
- Costa Mesa, California at South Coast Plaza opening Fall 2008
[edit] 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 jewellery. These are generally colored gems, but at least one company, Apollo Diamond, is offering colorless synthetics, although only in sizes up to 0.06 carats[10]
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."[11][12]
[edit] Conflict diamonds
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, although they came under scrutiny and were widely believed to be a prominent dealer of conflict diamonds. 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.[13][14]
De Beers states that 100% of the diamonds it now sells are conflict-free. According to the company, all De Beers diamonds are purchased in compliance with national law, the Kimberley Process Certification Scheme[15] and its own Diamond Best Practice Principles.[16]De Beers is active in the Kimberley Process, which aims to eliminate conflict diamonds from world diamond flows, and the Diamond Development Initiative (DDI).[17] 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.
[edit] Legal issues
In 2004, De Beers pleaded guilty and 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 refused to appear in court, but ten years later "admitted [to] conspiring to fix prices in the $500 million industrial diamond market", pleaded guilty, and agreed to pay a $10 million fine.[18][19]
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 settlement, which is not expected to be final until at least April 2008, persons who purchased diamonds within the past ten years may be eligible for a certain level of compensation.[20]
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.
[edit] External links
- [12] De Beers Group official web site
- [13] De Beers reports
- [14] Debswana official web site
- [15] Namdeb official web site
- [16] Kimberley process official web site
- [17] - From Mine to Mistress by Chaim Even-Zohar, Corporate Strategies and Government Policies in the International Diamond Industry
- Have You Ever Tried to Sell a Diamond? by Edward Jay Epstein (February 1982 Atlantic Monthly)
- Mining, De Beers, Anglo American Documentary On Google
[edit] See also
- Diamond (gemstone)
- Diamonds
- Conflict diamonds
- Kimberley Process – process designed to certify the origin of diamonds from sources which are free of conflict
- Diamonds as an investment
- Snap Lake Diamond Mine Project – first De Beers mine outside South Africa
[edit] Popular culture
- The popular band, the Arctic Monkeys, played "Diamonds are Forever" at Glastonbury in 2007.
- Crime journalist Kris Hollington has written a book, Diamond Geezers, about the spectacular attempted theft of the De Beers Millennium Collection from the Millennium Dome which took place in November 2000.
- The 1971 James Bond film Diamonds Are Forever directly cites De Beers.
- Comedian Ron White (of Blue Collar Comedy Tour fame) has mentioned the De Beers slogans in his stand-up routines, claiming that they should just "go ahead and say it: Diamonds...that'll shut her up."
- In his book, Myths, Lies, and Downright Stupidity: Get Out the Shovel--Why Everything You Know Is Wrong (ISBN 1-4013-0254-8), journalist John Stossel included a section detailing the history of the DeBeers monopoly of the worldwide diamond markets.
- In 1994, the PBS special "The Diamond Empire" tells a very detailed story about the diamond industry. http://www.pbs.org/wgbh/pages/frontline/programs/transcripts/1209.html
- In Soldier of Fortune, episode 4, season 12 of the television show Law & Order, De Beers is the basis for the fictional Gerard Diamond Company.
- The 2003 comedy How To Lose A Guy In 10 Days depicts the fictitious diamond mogul couple, the "DeLauers". This is a play on the name De Beer.
- In the film Blood Diamond, De Beers is represented by the fictional corporation, Van De Kaap.
- In the film Flawless, De Beers is represented by the fictional corporation, London Diamond.
- In the 2007 comedy Knocked Up Seth Rogen's character, Ben Stone, proposes to Katherine Heigl's character, Alison Scott, with an empty box. He says he doesn't have the ring yet but one day he will give her the ring she deserves. He has already chosen it and it's at De Beers.
- The webcomic Questionable Content, in strip number 774, has sarcastically accused De Beers of "subverting humanity's genetic drive to reproduce so we'll buy more jewelry."
[edit] References
- ^ [1]
- ^ [2]
- ^ [3]
- ^ [4]
- ^ [5]
- ^ [6]
- ^ [ http://www.debeersgroup.com/en/Sales-and-distribution/Sights-and-Sightholders/]
- ^ [7]
- ^ LVMH - Louis Vuitton Moet Hennessy
- ^ Apollo Diamond, accessed 12 June 2008. [8]
- ^ Davis, Joshua The New Diamond Age Wired, Issue 11.09, September 2003, accessed online February 11, 2007
- ^ Welbourn, Dr. Chris.; Fisher Dr. David De Beers' Research Yields HPHT Secrets Rapaport News, posted online May 6, 2002, accessed online February 11, 2007
- ^ De Beers Group De Beers Report to Stakeholders 2005/6 - Ethics, "Conflict and Instability" De Beers Group, accessed online February 11, 2007
- ^ [9]
- ^ Kimberley Process
- ^ [10]
- ^ Diamond Development Initiative (DDI)
- ^ De Beers pleads guilty in price fixing case - World business - MSNBC.com
- ^ DeBeers Pleads to Price-Fixing (washingtonpost.com)
- ^ DeBeers Settlement
- Epstein, Edward Jay (1982). "THE DIAMOND INVENTION" (Complete book. An in-depth research into the history of De Beers as a company and the development of the modern diamond market)