" A Diamond is forever..
nevertheless power can be not”
Deb E W EE 3rd there�s r S C A S i9000 E H T UD Y
A Cash Cow Industry
An estimated US$13 billion well worth of difficult
diamonds happen to be extracted every year
Removed diamonds can be utilised for
industrial purposes or in the luxurious sector
Diamond jewellery is worth more than US$72
billion dollars per year (very high profitability)
The biggest slice of the cake
A giant's first measures
Founded in 1888 in South Africa by Cecil
Rhodes, Para Beers quickly obtained a dominant
placement in the world precious stone market.
In just a several years, DeBeers started to be the leading
firm of an worldwide cartel, typically
thanks to Ernest Oppenheimer as well as its heirs.
" Common sense tells us that the only way
to improve the value of diamond jewelry is to
make sure they are scarce, that may be to reduce
The Diamonds " Trilogy” for success
You will find 3 primary pillars to get the maintenance of
major position with time:
Control of source through gemstone
DeBeers sales and distribution arm:
Marketing and advertisement
The Lion and the Gazelle
In the 80s Zaire (DROC) measured for 3% of
world production of business diamonds and
was person in the De Beers' association
The region asked for a reduced a controlling fee,
asks for were declined and in 81 Zaire left
8 weeks later the market was overloaded by
diamond jewelry and the value fell dramatically.
Strike by the deficit of foreign currency Zaire
asked to be admitted once again in the affiliation.
Obviously De Beers imposed even worse conditions
There is no formal proof that it was De Beers,
but just De Sodas had the power to act through this
Economic Hurricane by Israel
In 1970s, Hyperinflation in His home country of israel and Retailers wanted to hoard up
expensive diamonds for advertising them later on.
PDVic < PDViD
To stop retailers from breaking away from its cartel, DeBeers:
- Produced temporary surcharge.
- Slice Israeli dealers' quota by 20%.
-- Dismissed these people from the CSO
As an outcome, Israeli dealers again conceded to DeBeers contract and paid a
Thus the DeBeers cartel was increased.
From Russian federation with like (…and return)
Why is Russian federation so important?
Large quantities of expensive diamonds discovered in The ussr in
1957: it became one of the most powerful single producer
beyond the cartel (20-30% of planet's production)
Therefore DeBeers was seriously under risk
Quickly negotiated a
(Mirny Gemstone Mine, present in the
Act I: The trick Agreement
The estimated car finance terms were:
DeBeers dedicated to purchase 95% of
Russian output and trade that with CSO.
Soviet Diamond Industry was in order to cut,
enhance and sell the rest of the 5% autonomously.
Russian diamonds had been paid a cost 10%
greater than general association price.
Action II: The last Agreement
In the eighties Russia deviated from the arrangement
It was not penalized! On the contrary, a compromise was
-- Soviet Union officially became a member of the agglomeration
- Para Beers certain steady influx of foreign exchange by buying every its outcome
While coach anyone how to possible to force little players
(Zaire) back to the cartel, that wasn't so simple
pertaining to bigger manufacturers (Russia).
DeBeers' business fell by 90% in the
1980s to less than 40% in 2012
" In the event everyone supports to the association, then
everybody wins. When anyone is silly enough
to be able to the contract, then EVERYBODY