The History of DeBeers

Cecil Rhodes was the founder of DeBeers and he started simply by renting water pumps during the rush of 1871. Then an 83.5 carat diamond was discovered in the Kimberly Mine in South Africa. He used the proceeds to buy small mining operations and started his own. To fund his new mining operations, he was able to get capital from the Rothschild family. DeBeers was founded in 1888 and, at that time, the company owned all the diamond mine operations in Africa. In 1902, the Cullinan Mine was founded and its owner refused to join DeBeers. The diamonds instead were sold to diamond dealers Bernard and Ernest Oppenheimer which then reduced the power of DeBeers. Soon the Kimberly Mine opened producing the largest diamond rough ever found, the Cullinan diamond weighing 3,106.75 carats. This mine produced so many carats of diamonds that it equaled all of the DeBeers mines combined. Ernest Oppenheimer understood that the way to increase value was to decrease production or make diamonds scarce so during World War I the Cullinan mine was assimilated into the DeBeers Group. In 1902, Rhodes died thus giving DeBeers 90% of the world’s diamond production. In 1927, Ernest Oppenheimer took over the chairmanship of the company and in 2000, producers in Russia, Canada and Australia distributed diamonds outside of DeBeers and their monopoly ended. Today, together with its partners, DeBeers operates in 20 countries and employs 13,000 people. They are the largest diamond producers in Botswana, Namibia, South Africa and Canada. DeBeers looks to encourage long term indisputable development in Africa and returns more than $3.0 million dollars to the country every year.