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De Beers SA
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De Beers SA
Johannesburg South Africa
+ 27 (0) 11 374 7000
http://www.debeersgroup.com
Type:
Private
De Beers SA, the world's largest diamond miner and marketer, is the holding company for De Beers Consolidated Mines Limited (DBCM) and De Beers Centenary AG. It in turn is owned by the South African resources giant Anglo American, the Oppenheimer family, and Debswana Mining.
DBCM controls the South African mining interests of De Beers SA. The company's mines in South Africa produce about 12 million carats of the gem every year. Nearly half of that is from its Venetia mine.
De Beers Centenary controls the De Beers diamond mining interests outside of South Africa, such as 50% stakes in Debswana (with the government of Botswana) and Namdeb (with the government of Namibia), as well as mining interests in Canada, Russia, and Tanzania. The company mines more than 30 million carats annually, mostly from its Debswana operations.
De Beers also has a retail venture called De Beers LV, partnering with Louis Vuitton Moet Hennessy, to directly market their diamonds to consumers. (1)Contents |
Corporate Structure
Ownership
De Beers SA is owned by three groups: the Anglo American and the Oppenheimer family (45% each) and Debswana Mining.
De Beers SA is the holding tank for De Beers Consolidated Mines and De Beers Centenary,
De Beers also has a few subsidaries, such as the retail companies De Beers LV (w/ Louis Vuitton Moet Hennessy) and Element Six. They also own the Diamond Trading Company, which is De Beer's sales and marketing division.
Apart from their own companies, De Beers owns stock in other diamond companies around the world.
A diagram, taken from the De Beers group website, shows the main structure of the company (2):
Links
- De Beers Group
- De Beers LV
- Diamond Trading Company (America)
- Diamond Trading Company (UK)
- Element Six
Criticisms
Anti-trust Indictments
Antitrust indictment by the U.S.
At it's peak, De Beers held 80% of the market share. Using this monopoly, they were able to create an artificial scarcity, causing diamond prices to remain high. Because of antitrust laws and a ruling made by the Department of Justice in 1945, De Beers was unable to sell the diamonds directly to the United States, although many of their gems reached America through other intermediaries based in London, England.
During 1991 and 1992, De Beers colluded with General Electric to suppress an artificial diamond manufacturing process. Both companies were indicted for breaking antitrust laws in 1994 by the United States government. De Beers was found to be guilty, although charges against G.E. were dropped. Because the U.S. has no jurisdiction over the company, no sentence was served.
In an effort to reach the American market, which already constitutes 50% of their sales, De Beers chose to plead guilty to the charges ten years after they were made. After paying a $10m fine, they were able to operate directly with the United States without probation.
Antitrust indictment by the E.U
De Beers was also probed by the European Union concerning their purchases from Alrosa, a Russian state-owned mine. De Beers had been buying $800m worth of diamonds from the Russian company every year, but made an agreement with the European commission in December of 2004 to limit their purchases to just $275m by 2010.
More Information
- 12/21/04: De Beers offer set to end EU probe: De Beers and Alrosa offered to scale down a proposed sales agreement to end an antitrust investigation by the European Commission.
- 7/14/04: South Africa - De Beers pleads guilty to price fixing: DeBeers SA pleaded guilty to price fixing and agreed to pay $10 million to settle a 10-year-old indictment.
- 4/8/04: De Beers close to US entente: A year short of its 60th anniversary, the epic spat between the American government and De Beers may finally be coming to an end.
Environmental Record
Articles
- 7/29/03: Diamond mine project clears hurdle, De Beers has made environmental pledges: An environmental assessment has been completed for a diamond-mine project in the Northwest Territories
- 9/6/01: Gem of an industry is losing its moral lustre: Diamond production at Jwaneng requires no cyanide acids or smelting, more commonly associated with gold and platinum production
- 12/9/90: Threat to Charles wildlife paradise: A unique delta and flood plain in the Kalahari desert is in danger of being turned into desert by developers
More information
- Media - Diamonds arent forever, Environmental degredation and Civil War in the Gem Trade by Katherine Kerlin
- Social policies of De Beers and other global mining companies from the Mineral Resources Forum
Human Rights Violations
Involvment with blood diamonds
Conflict diamonds (also known as blood diamonds) are illegally mined to provide financial support for a regime or invading army. These conflict diamond mines are located all over the world, including but not limited to the Democratic Republic of the Congo (DRC), Angola, Sierra Leone and Liberia.
Since it's inception in 1888, the De Beers strategy was to monopolize the diamond industry as best as they could. De Beers purchased the vast majority of the gems produced outside their own mines, allowing them to create a false scarcety and to fix diamond prices (see Anti-trust indictments by the U.S and E.U.).
The diamonds purchased from the external mines often came from war torn countries who were selling illegal conflict diamonds. Through De Beers' support, the insurgents were able to purchase weapons and support their militaries, feeding violent conflict even further.
When the U.N. began to look into De Beers' business endeavors with rebels in the Democratic Republic of the Congo in 2002, De Beers quickly agreed to sanctions, barring themselves from purchasing any blood diamonds in the DRC, Angola and Guinea.
Although all their offices were closed, De Beers still owned shares of mining companies in the three countries, such as The Société minière de Bakwanga (MIBA) in the DRC. Many guards protecting MIBA, which is controlled directly by the Congolese governement, accept bribes from people who intend to illegally remove diamonds from the mine. These illegal miners are often caught by other guards and shot dead. According to Amnesty International estimates, several dozen miners were murdered each day. Others were reprehended and placed in an unsanitary cell with no toilet.
Since pleading guilty to breaking U.S. antitrust laws in 2004, De Beers has focused on harvesting diamonds from their own mines instead of trying to control the entire world market. They have created policies protecting their workers and no longer do business directly with conflict diamond mines. De Beers has also worked with the E.U. to create a diamond certification program called the Kimberley Process Certification Scheme.
Articles
- 9/30/04: Bushman accuse De Beers of stealing diamonds
- 10/31/03: UN Says War Fueled by Foreign Firms
- 10/22/03: Making a killing/The diamond trade in government controlled DRC
- 11/8/02: Conflict Diamonds are Forever
- 9/21/00: Blood Diamonds are Guerrillas Best Friend
- 8/3/00: The New Diamond Con
- 12/14/98: Industry under fire over Unita diamonds
More Information
- De Beers and Beyond: The History of the International Diamond Cartel
- Guarding the Multinationals: De Beers hired former British counter-intelligence officers like Sir Percy Sillitoe to launch a diamond war in Sierra Leone and evict rivals.
- The Kimberley Process Certification Scheme one year ahead: state of affairs in the European Union
Lobbying and Litigation Practices
- 2/6/05: Nicky Oppenheimer has put De Beers at the heart of a unique experiment in post apartheid South Africa: Head of De Beers must negotiate with a government that makes no secret of its socialist bent.
- 12/21/04: De Beers offer set to end EU probe: De Beers and Alrosa offered to scale down a proposed sales agreement to end an antitrust investigation by the European Commission
- 8/22/00: Controversy Over Diamonds Made Into Virtue by De Beers: The company has effectively enlisted the United Nations as a policeman to do the job that dictators and mercenaries once did
- The Kimberley Process Certification Scheme one year ahead: state of affairs in the European Union: De Beers invovlement with the E.U. in creating policy change
Worker's Rights
Articles
- 3/2/05: Miners decry SA transformation: Insiders at De Beers Consolidated Mines (DBCM) feel the mining giant is moving too slowly on the issue of transformation and many in its ranks are actually planning on how to avoid it completely.
- 3/1/04: Solidarity Rejects Cuts at De Beers Mines: Trade union Solidarity hit out at mining group De Beers, following a warning that 1270 workers faced retrenchment
- 10/13/04: South Africa Workers Launch $100bn Lawsuit: A $100bn lawsuit seeking compensation for workers employed in South Africa during the apartheid era
- 4/7/03: US faces $1bn claim for complicity (Also covers claim against Anglo American and De Beers)
- 8/13/02: De Beers to give workers AIDS drugs: De Beers became the latest company to extend anti- retroviral treatment to its entire workforce
- 10/24/95: De Beers sends workers wives to jail: The National Union of Mineworkers is appealing against prison sentences imposed on three miners' wives for trespassing at a De Beers mine
More Information
- Working conditions inside De Beers diamond mines by Janine F. Roberts
Alternatives to De Beers
- Snooty Jewelry: http://www.snootyjewelry.com/
- GreenKarat: http://www.greenkarat.com/
Sources
- (1) Hoovers.com
- (2) debeersgroup.com
- Dangerous Diamonds by Roy Davies
- The Diamond Invention by Edward Jay Epstein
