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    De Beers: Prepared By: Kinshoo Shah

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    kinshoo shah
    De Beers is the largest company in the diamond mining, trading, and manufacturing industries. It mines diamonds in Botswana, Namibia, South Africa, and Canada. For over a century, De Beers had a monopoly on the world's diamond supply and controlled prices through restricting supply. However, this monopoly ended in 2000 due to other producers distributing diamonds outside of De Beers. India has become a major player in diamond cutting and polishing, centered in Surat. However, child labor remains an issue in some parts of the diamond industry.

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    De Beers: Prepared By: Kinshoo Shah

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    kinshoo shah
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    De Beers is the largest company in the diamond mining, trading, and manufacturing industries. It mines diamonds in Botswana, Namibia, South Africa, and Canada. For over a century, De Beers had a monopoly on the world's diamond supply and controlled prices through restricting supply. However, this monopoly ended in 2000 due to other producers distributing diamonds outside of De Beers. India has become a major player in diamond cutting and polishing, centered in Surat. However, child labor remains an issue in some parts of the diamond industry.

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    De Beers is the largest company in the diamond mining, trading, and manufacturing industries. It mines diamonds in Botswana, Namibia, South Africa, and Canada. For over a century, De Beers had a monopoly on the world's diamond supply and controlled prices through restricting supply. However, this monopoly ended in 2000 due to other producers distributing diamonds outside of De Beers. India has become a major player in diamond cutting and polishing, centered in Surat. However, child labor remains an issue in some parts of the diamond industry.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    558 views28 pages

    De Beers: Prepared By: Kinshoo Shah

    Uploaded by

    kinshoo shah
    De Beers is the largest company in the diamond mining, trading, and manufacturing industries. It mines diamonds in Botswana, Namibia, South Africa, and Canada. For over a century, De Beers had a monopoly on the world's diamond supply and controlled prices through restricting supply. However, this monopoly ended in 2000 due to other producers distributing diamonds outside of De Beers. India has become a major player in diamond cutting and polishing, centered in Surat. However, child labor remains an issue in some parts of the diamond industry.

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    of 28

    DE BEERS.

    Prepared By:
    KINSHOO SHAH
      De Beers Family of Companies are in the diamond, diamond
    mining, diamond trading and industrial diamond manufacturing
    sectors.
     It is by far the largest company in all these categories.

     De Beers is active in every category of industrial diamond mining:


    open-pit, underground, large-scale alluvial, coastal and deep sea.
     Mining takes place in Botswana, Namibia, South
    Africa and Canada.

    Source: http://en.wikipedia.org/wiki/De_Beers
    What is De Beers?
    not retailer
    not manufacturer

    BUT

    miner and buyer of 70% of the world's


    rough diamonds

    arbiter of the prices


    ROUGH DIAMONDS
    CUT DIAMONDS
    JEWELRY
    FACTS ABOUT DE BEERS

     Most successful monopoly of modern trade

     Other commodity prices (e.g. gold, silver) fluctuate greatly in


    response to economic conditions

     Diamonds’ prices are constantly rising

     By 1890, De Beers controlled 95% of the world’s diamond production


    ORIGIN

     1869
     First diamond mines in the colonies of southern Africa
     Drastically increased the number of stones available

     1870
    Many diamond hunters bought mines
    CECIL RHODES

    Bought the rights to two mines


    on the farm of :

     Nicolas

    and

     Diedrick De Beer

    in the Cape Colony (now South


    Africa).
    DIAMOND HUNTERS REALIZED
    THAT SCARCITY INCREASES
    DIAMOND PRICES.

    Had no other alternative than to merge their interests into a


    single entity:

     control the mines’ production

     keep the scarcity illusion


    Before the 19th century: Nowadays:

     Diamonds were exceptionally Many diamond mines:


    rare  Republic of South
    Africa
     Small quantities in India and  Sub-Saharan
    Brazil countries
     Siberia
     No diamond mines were  Australia
    discovered
     Canada
    DE BEERS IS A TYPICAL
    EXAMPLE OF MONOPOLY!!!

     It is almost the sole seller of


    diamonds
     Sells a commodity with no close substitutes
    (created this illusion by advertising)

     It restricts output and it responds to changes in market


    demand
    Cartels are immoral because they overcharge the buying
    public by artificially propping up prices.

    Source: http://www.ewtn.com/library/business/antdebrs.htm
    ANTWERP WORLD DIAMOND CENTRE
    • The fact that Antwerp functions as a major diamond
    trade and production centre worldwide, is reflected in
    the cultural diversity of the Antwerp community.
    • Quality label ‘cut in Antwerp’

    • More than 80% of the world consumption of rough,


    polished and industrial diamonds passes through
    Antwerp.

     Contribution to total Belgian export 7% 


     Share in World rough supply 80% 
     Share in world polished supply 50% 
     Share in world supply of natural industrial diamonds 40%
     Overall share in global diamond trade 60%

    • 6 out of 10 of their most important non-European


    Union trading partners: USA, Israel, India,
    Switzerland, Hong Kong and China.
    http://www.certified-gems.com/Antwerp_diamond_market.htm
    “De Beers:
    A diamond is forever…”
    De Beers:
    A monopoly is forever?
    END OF MONOPOLY..
     Firstly, it convinced independent producers to join its
    single channel monopoly, it flooded the market with diamonds similar to
    those of producers who refused to join the cartel, and lastly, it purchased
    and stockpiled diamonds produced by other manufacturers in order to
    control prices through supply.
     However, the De Beers model changed in 2000, due to factors such as the
    decision by producers in Russia, Canada and Australia, to distribute
    diamonds outside of the De Beers channel, thus effectively ending the
    monopoly.
     The diamond industry of the early 21st century is markedly different from
    that of the twentieth, and is a complex and constantly evolving geo-
    political phenomenon.
     Current major players in the diamond industry are the African producers
    Debswana and Namdeb, De Beers, Rio Tinto, BHP Billiton, Lev
    Leviev,Harry Winston, and Alrosa.
    NAKSHATRA FLAGSHIP

     Nakshatra (Constellation) revitalised


    floral jewellery

     Launched October 2000

     Sales over $100m in 3 years. No. 1 brand


    in India

     Awarded status
    SURAT, THE 'DIAMOND
    CITY OF INDIA'

     Much of India's diamond trade is controlled by a handful of wealthy


    families, many with the common surnames of Jhavari, Mehta, and
    Shah.
     The De Beers controlled Diamond Trading Company (DTC) has
    demonstrated Gujarat's power in the diamond-cutting arena by
    increasing its take of the DTC's 125 lucrative 'sightholder' contracts
    to nearly 50 in 2005.
     Surat itself is expected to process $18 billion worth of the glittering
    gems this financial year

    http://gemmanews.wordpress.com/2010/10/18/india-determined-to-keep-upper-hand-in-diamond-cutting-and-polishing/
    DIAMOND BUSINESS IN INDIA
     It is estimated that India cuts, polishes, and exports over one-
    billion dollars worth of gems per year.
     Gitanjali Gems is India's largest manufacturer of diamonds, with
    cutting facilities in Surat's 'Special Economic Zone' and in
    Borivali, Mumbai.
     All are facilitated through the Hindustan Diamond Company Ltd.
    (HDC), and De Beers India.
     According to the Times of India, as of April 1, 2006, the Gujarat
    state government has exempted Surat's diamond-cutting industry
    from state-imposed VAT (Value Added Tax) taxes.
     From a mere $8 billion worth of exports in 1999-2000, the Indian
    gems and jewellery industry has captured about 80% of the
    global polished diamond share.

    http://www.allaboutgemstones.com/history_gem_cutting_gujarat.html
    Analysts have forecast CAGR of 14.7% during 2010-2012 for the
    gems and jewelry industry in India.

    https://www.religareonline.com/Featuredstorydetails.aspx
    INDIA CATCHING UP DIAMOND BUSINESS..
     India accounts for approximately 60% of the global polished diamonds in
    value terms,
     80% in karatage and 90% in pieces.
     Govt. initiatives- interest rebates,
     establishment of SEZs
     extension of credit periods and
     export duty benefits available to the sector.

     The Indian gems and jewellery sector is forecast to grow over USD 26
    billion by 2012, driven by availability of huge base of skilled labour and
    improving lifestyle.
      India boasts of one of the lowest per carat diamond cutting and polishing
    costs (at around USD 10) thereby leading to comparatively low cost
    jewellery, and hence amplifying the overall consumption.
    CHILD SLAVE LABOR

     Estimates of the numbers of working children in India vary


    between 20 million and up to100 million.  (May 2005)
     Approximations of child workers in the gem industry in Jaipur
    range from 7,000 to 13,000.
     Workplace conditions are commonly bad.
     They are congested, poorly lit and ventilated, and over half of
    the industry's workforce suffers from work-related ailments
    such as kidney dysfunction, lung disease, stomach problems,
    wheezing, pains in their joints and eyesores. 

    http://ihscslnews.org/view_article.php?id=61
    SUSTAINABILITY

     Diamond business is not glittery.


     De Beers is the price maker & controls the supply of diamonds.

     De Beers publishes an annual "Report to Stakeholders" which is


    coordinated by Maplecroft Consultants in the United Kingdom.
     The report covers De Beers approach, economics, ethics,
    employees, communities, environment, and a range of case
    studies, initiatives and related web sites.
     The first report was published in 2006.

      It was reviewed by Ethical Corporation magazine as "transparent


    but not entirely reader friendly."

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