For many years, males in lots of international locations have been anticipated to spend two and even three months’ wage on a diamond engagement ring. This notion – and the long-lasting standing of this gem – didn’t come about by chance.
The story goes again to 1870, when an Oxford College dropout named Cecil Rhodes set off to strive his luck within the Cape Colony – modern-day South Africa, then a key British area.
Seeing the burgeoning diamond mining sector there, he started renting water pumps to diamond prospectors to stop flooding of the mines. Then, over the following 20 years, Rhodes and his accomplice Charles Rudd proceeded to purchase out a whole lot, after which hundreds, of small mines and “claims” – landholdings believed to comprise diamonds – typically for a pittance when their house owners confronted chapter. Most miners have been small operators, and Rhodes and Rudd had entry to critical monetary capital – notably the Rothschild banking empire – via their connections in London. As the 2 companions mixed claims into bigger mining items, overhead prices have been lowered, and operations grew to become extra worthwhile.
The companions included as De Beers Consolidated Mines, De Beers being the title of one of many mines they took over. By 1888, the corporate had a near-monopoly of South African claims and lively diamond mines. With diamonds making up greater than 25 % of South African exports in 1900, De Beers grew to become a powerhouse of the nation’s financial system, controlling some 90 % of the world’s whole diamond provide. Rhodes himself grew to become a number one imperial determine, serving as prime minister of the Cape Colony from 1890 to 1896.
De Beers was based upon the racist insurance policies of South Africa, which on the time was dominated by a white minority. The diamonds have been extracted by Black miners incomes subsistence wages, whereas De Beers’s white, European-origin shareholders loved the earnings.
Following Rhodes’s dying in 1902, management of De Beers in the end handed to German-born entrepreneur Ernest Oppenheimer. Oppenheimer used a mixture of economic incentives, strategic strain, and diplomacy to steer diamond suppliers in different international locations to promote solely via the London-based and De Beers-owned “Central Promoting Group” (CSO), which within the Thirties grew to become the unified gross sales channel for just about all of the world’s pre-cut diamonds. This enabled De Beers to stockpile diamonds, strictly management the discharge of stones to the worldwide market, and successfully management costs – thereby creating an phantasm of diamond shortage worldwide.
In the meantime, De Beers sought to reinforce international demand for diamonds. In 1946, the corporate employed NW Ayer, a Philadelphia-based promoting company, which one 12 months later got here up with the legendary slogan, “A diamond is ceaselessly”. This reframed the diamond and, particularly, the diamond engagement ring, as an emblem of “everlasting love”. By means of mass promoting, product placements in movies, and superstar PR – for instance, lending jewelry to actors for main occasions – the marketing campaign reworked the diamond market within the US, Europe and Japan.
Lasting 64 years, till 2011, this marketing campaign was an astounding international success, with Advert Age journal naming “A diamond is ceaselessly” as the highest commercial slogan of the twentieth century. De Beers had manufactured a social norm, with the diamond engagement ring changing into nearly necessary in each developed market. Whereas beforehand, a fiance would possibly give a locket, a string of pearls, or a household heirloom to his meant, the variety of American brides with a diamond ring climbed from 10 % in 1940 to some 80 % in 1980. In Japan, this determine rose from lower than 5 % in 1960 to 60 % by 1981.
By the early Nineteen Fifties, a diamond ring sometimes price about $170 – about $2,300 in as we speak’s cash. De Beers commercials initially recommended spending one month’s wage on an engagement ring, however by the Eighties, they have been posing the query: “How are you going to make two months’ wage final ceaselessly?” Shoppers appeared undeterred by the truth that a diamond’s resale worth was sometimes simply 50 % of its authentic retail value (in distinction to gold, which has an “official” benchmark value set twice-daily).
By the point Marilyn Monroe sang “Diamonds are a lady’s finest pal” in 1953 and the James Bond movie “Diamonds Are Eternally” was launched in 1971, the diamond had turn out to be an icon.
‘Cartel behaviour’
By the late Nineteen Seventies, De Beers was yearly distributing some 50 million diamond carats, with gross sales of greater than $2bn within the US alone.
However because the Eighties rolled round, issues began to emerge for the corporate.
De Beers got here underneath rising scrutiny because the anti-apartheid motion gained momentum in Europe and the US. Stories of its working situations have been stunning: low pay for mineworkers, minimal security coaching and crowded dormitory housing surrounded by barbed wire and safety checkpoints. This unfavorable publicity put De Beers firmly within the highlight as one of many prime beneficiaries of apartheid.
De Beers had already fought off allegations of “cartel behaviour” from the US Division of Justice. However in 1994, the corporate was indicted by a US grand jury on price-fixing prices. The corporate was barred from doing enterprise within the US, the place its executives might not set foot for concern of arrest.
Within the late Nineties, studies that the diamond commerce was financing brutal civil wars in Angola, Sierra Leone and the Democratic Republic of Congo additional soured shopper sentiment.
Insurgent teams focused “alluvial” diamond mines – comparatively easy-to-extract floor deposits, typically in riverbeds – promoting stones into the casual “gray” market and utilizing the earnings to purchase weapons. The phrase “blood diamonds” entered the lexicon as investigative articles depicted enslaved youngsters with pickaxes and shovels. De Beers was accused of turning a blind eye, if not outright complicity. The corporate’s gross sales declined greater than 20 % in two years, from about $5.7bn in 1999 to $4.45bn in 2001, with different diamond suppliers equivalent to Angola’s Endiama and Russia’s Alrosa equally affected.
However for the reason that early Nineties, modifications had been afoot at De Beers. Dealing with strain from South Africa’s newly elected African Nationwide Congress (ANC), it had launched higher situations and wages for its primarily Black mineworkers. On the similar time, Black South Africans additionally started to occupy some administration roles.
In the meantime, the US indictment meant the corporate had no alternative however to terminate its CSO in 2000, ushering in competitors from different producers. Diamond costs, not set and dictated by the CSO, grew to become extra unstable, topic to fluctuating demand, financial cycles, and geopolitical situations.
To counter the blood diamond backlash, De Beers helped implement the “Kimberley Course of” in 2003, via which diamond sellers can hint the origin of diamonds and authenticate “clear’’ diamonds with a microscopic stamp.
Not ceaselessly?
Right now, pure diamonds could have misplaced a few of their attract with the rise of “lab-grown” stones and “diamond simulants” equivalent to cubic zirconia, that are as much as 90 % cheaper than the mined selection and sometimes distinguishable from the actual factor solely by specialists utilizing specialised gear.
Over the previous two years, the diamond trade has been hit by a “good storm” of cheaper artificial stones, weak shopper demand within the US and China, sanctions in opposition to Russia and, extra lately, excessive US tariffs. This has had a widespread opposed influence: the Antwerp World Diamond Centre (AWDC) reported that tough diamond imports dropped 35 % in 2024, with general commerce declining by 25 % year-on-year (from $32.5bn to $24.4bn) – and within the Indian gem processing hub of Surat, at the very least 50,000 diamond employees have been rendered jobless in 2024. Not less than 80 diamond employees in India have died by suicide up to now two years.
In 2011, the Oppenheimer household bought its curiosity in De Beers to the London-based mining company Anglo American, one other main shareholder, for simply over $5bn. De Beers is now as soon as extra up on the market, once more with a $5bn price ticket, as Anglo American seeks to exit the declining diamond market in favour of copper, iron ore and uncommon earth minerals.
Regardless of the unstable market situations, whole international shopper diamond gross sales have been valued at roughly $100bn in 2024, with the common value of $6,750 for a diamond ring within the US, in keeping with the Pure Diamond Council – about 1.3 months’ commonplace wage in the US, however about eight months’ value of the worldwide median earnings. For these of higher means, London’s Harrods reportedly has a 228.31 carat, pear-shaped diamond out there to view by non-public appointment – with a value estimated to be in extra of $30m.
This text is a part of “Peculiar objects, extraordinary tales”, a collection concerning the stunning tales behind well-known objects.
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