What Is The History Of "De Beers" Organization?

De Beers is the largest diamond-mining organisation in the world. De Beers established its Central Selling Organisation (CSO) in 1934 to manage the supply of rough diamonds to world markets, eliminate price fluctuations and maintain public confidence in the value of diamonds as a luxury product. It does not cut or polish the stones itself nor does it make or sell diamond jewellery.

Its Consumer Marketing Division (CMD) promotes diamond jewellery for the industry as a whole, as a means of stimulating demand for rough diamonds. For over 60 years the CSO has bought rough diamonds from producing nations and in the open market as well as handling De Beer's own mining output. At the CSO offices in London the rough diamonds are sorted into 14,000 categories in readiness for the ten "sights" (where 160 leading "sight holders" – leading diamond cutters and polishers or dealers from all over the world buy rough diamonds which will eventually be cut and traded, and then turned into jewellery.

In 1997 the CSO's "single channel marketing" system accounted for over 65-70% of world diamond production. The other main contribution of De Beers is the promotion of diamond jewellery for the industry, through advertising campaigns developed from extensive market research, trade promotion activities and jewellery design competitions. The CMD spends approximately US$200 m per year on this. By 1998 advertising campaigns were being conducted in 34 countries across the world and in 21 different languages.

In 1995 worldwide sales of polished diamonds were US 9bn. In jewellery form they were worth US$45bn. According to De Beers the global retail market for diamond jewellery rose by 40% more than the rate of inflation between 1980 and 1997. The CSO has raised rough diamond prices by 50% between 1986 and 1998. Retail prices of gem diamonds remained stable despite the financial crisis in Asia, whereas near-gem prices fell 20% owing to an oversupply from Russia and Australia.

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