De Beers: The “reformed” diamond distributor...
When thinking of diamonds, most people typically conjure up images of the sparkling gemstones. However, many immediately think of well-known diamond brands and distributors, like the indomitable De Beers.
With slogans like “Diamonds are forever”, De Beers has certainly garnered some attention over the last century. In fact, it’s one of the largest diamond companies to ever exist, boasting influence in most areas of diamond distribution.
When it comes to De Beers, many shoppers cringe at the company’s historically unethical actions of diamond mining and production. However, did you know De Beers has recently taken a stand to promote sustainable and ethical business practices?🌳 Let’s look at how this diamond giant is shaking up the world of diamond mining and distribution for a more future-focused initiative.
Before we discuss De Beers’ efforts to promote sustainable and ethical business, let’s look at the history behind this massive brand that’s heavily influenced the diamond industry. While it’s not always pretty, understanding where De Beers began is paramount to appreciating their efforts today.
The name “De Beers” dates back to the 1860s, and it’s a callback to brothers Diederik Arnoldus De Beer and Johannes Nicolaas De Beer. These Dutch settlers owned farmland in South Africa, which they would soon learn was rich with diamonds.
Upon discovery of diamonds on their land, the brothers sold their farm to a merchant at the behest of the British government. Alfred Johnson Ebden bought their land for £6,600, and the site would soon become the location of two major diamond mines: the “Big Hole” and De Beers diamond mine, which was named in honor of the original landowners.
The story of the De Beers company begins in 1888, when Cecil Rhodes—a British businessman—made a pretty penny renting water pumps to diamond miners during the diamond rush. As a result, he decided to reinvest his money in the industry and buy up the claims of small mining operations to consolidate their efforts.
With the right funding, he was able to start his own mining operation through consolidation, and he joined his mines with those of Barney Barnato to form De Beers Consolidated Mines. Thus, the illustrious brand was born, and before long, De Beers Consolidated Mines, Ltd. had control of all diamond mining, production, and distribution in South Africa!
De Beers Consolidated Mines, Ltd. soon became a name known around the globe. Londoners knew it as the Diamond Trading Company, but industry leaders in Israel referred to the company as “The Syndicate” and Europeans in general knew De Beers as the “CSO”.
The CSO, or Central Selling Organization, was a segment of the Diamond Trading Company (DTC), that Rhodes utilized to control buyers and “sightholders” via approved, non-negotiable sales. In turn, Rhodes’ company manipulated supply and demand in several regions, eventually creating a monopoly on diamonds across the globe.
Rhodes could now control exactly when diamonds would enter the market, which meant he could withhold stones during economic trials and increase supply when times were more favorable.⚖️ By doing so, Rhodes directly changed diamond pricing in his favor, and the monopoly over global diamond supply flourished into the early 20th century.
Rhodes died in 1902, and Ernest Oppenheimer, a rival diamond magnate, slowly made his way onto the company’s board to become chairman. With global control in mind, Oppenheimer used the CSO to draft exclusive contracts with all diamond sellers and distributors, meaning no one could deal in diamonds outside of the De Beers brand.
After years of controlling diamond supply and demand, Oppenheimer witnessed the global decline of diamond prices in the 1930s. Not to be outdone by a bad market, he laid the foundation for the famous “A diamond is forever” campaign in 1947 to bolster buyer interest in diamonds.
With the help of N.W. Ayers advertising agency, Oppenheimer’s son, Henry, successfully convinced their new target audience—Americans—that diamonds were an eternal symbol of love.💝 The campaign was a success, and similar campaigns were utilized in Japan, Brazil, and Germany to bolster diamond prices. As a result, the demand for diamonds soared.
By the mid-20th century, competition presented itself in the form of mines in Canada, Russia, and Australia. Many diamond distributors had grown weary of De Beers “single channel” system where the organization controlled all sides of the diamond market. Consequently, mines in these regions slowly stopped selling their diamonds to De Beers and the DTC, halting De Beers’ hold on the global diamond supply.
Losing market share and fearing the worst, De Beers decided to expand their efforts into diamond retail stores and redefining the brand itself. Although De Beers owned nearly 90% of the diamond market at one point, they own less than 35% of the diamond supply today!
After decades of power and control in the diamond industry, De Beers is now using their influence to affect important changes to the way diamonds are mined. The company has pledged their allegiance to sustainable mining and the ethical treatment of workers, spearheading several initiatives to make the diamond industry a safe place to work.🌱
Here are a few major initiatives De Beers has utilized to transform the historically questionable diamond industry:
Established in 2000 by the United Nations (UN), the Kimberley Process Certification Scheme is an operation that unites governments and diamond distributors around the world to reduce the flow of conflict diamonds into the global supply. By limiting the trade of conflict diamonds, authorities are better able to protect workers and reduce bloody civil wars fought over diamond mines.
De Beers has been a proponent of the Kimberley Process since its inception, and the company still actively engages with participating states and the UN today. In fact, De Beers is a member of the World Diamond Council (WDC) executive committee, which means the brand participates in all meetings related to the Kimberley Process and works closely with other members of the group to ensure the program continually grows.
To further their dedication to a world of conflict-free diamonds, De Beers developed their own technology for effectively tracking a diamond’s chain of custody. It’s called Tracr, and it’s a blockchain-enabled system that can provide the details of every single diamond in their distribution chain in mere seconds!
Tracr uses high-grade security, blockchain technology, and artificial intelligence to create a digital record of every diamond. These records contain each stone’s specs and whereabouts at any given time, and they serve as a protected ledger that tracks every instance in which the diamond is handled or accessed.💾 The ledger can only be edited by approved users, and any change to the information will notify the necessary authorities to ensure the diamond hasn’t been compromised.
By tracing the entire value chain of their diamonds, De Beers can more easily defend against conflict diamonds, which are often smuggled into supply by switching them with conflict-free gems. As such, De Beers protects local diamond mining communities and promotes ethical and environmentally-friendly practices via their dedication to tracking diamonds efficiently.
While lab-grown diamonds are a more recent addition to current shopping trends, De Beers has actually been researching them since the 1950s! Most early lab-grown stones were used for industrial purposes, but today’s gems are affordable, durable carbon copies of natural diamonds.
Lab-grown diamonds are becoming increasingly popular, as they’re both ethical and sustainable. They require much less waste and energy during production, and the labor used to create them is confined to a lab rather than using manual labor in a mine. This means it's easier to regulate conditions and promote safe working environments, fair pay, and environmentally-friendly sourcing.
To promote the use of lab-grown diamonds, De Beers established Element Six—a leader in the development of lab-created diamonds. Element Six also creates tungsten carbide supermaterials, and their products are used to produce efficient, high-quality industrial tools.
For consumers, De Beers invested $100 million in Lightbox, a lab-grown diamond retailer. Lightbox utilizes De Beers’ diamond lab technology to grow roughly 200,000 diamonds per year! They’re headquartered in Portland, and they promise at least VS clarity, a very good cut, and near-colorlessness for all white diamonds in their inventory.
De Beers has been looking to the future and thinking of ways their brand can make a lasting impact for the next generation. As a result, they’ve compiled their “Building Forever” 2030 goals that will hopefully promote sustainable and ethical business practices well into the next few decades!
The Building Forever initiative focuses on four core pillars: Partnering for Thriving Communities, Protecting the Natural World, Accelerating Equal Opportunity, and Leading Ethical Practices Across the Industry. Each pillar is designed to address a major concern brought about by diamond mining, and they act as the vision for all business decisions made by De Beers today. In fact, De Beers hopes these initiatives will leave a positive impact that can be felt long after the company itself ceases to exist!🤗
There are so many initiatives under the four pillars roadmap that De Beers is actively working on to better their business practices! This list includes but is not limited to:
For more information on De Beers’ efforts and how you can get involved, click here.
As ethical and environmentally-friendly practices become key factors in shoppers’ minds, businesses are looking to the future and finding ways to transform the bloody origins of diamond mining into something sustainable and commendable by socially-focused buyers. These are just a few ways De Beers is changing the game, but diamond distributors from across the globe are rethinking their processes and making concerted efforts to give back and leave fewer footprints.
With advances in technology, creating diamonds in a lab has become easier than ever. These sustainable gemstones are 100% carbon copies of real diamonds, and they require just a small fraction of the energy used to mine real diamonds! Click here to learn more about lab-created diamonds and how they’re revolutionizing the diamond industry.
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