Diamond Chain Analysis

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Diamond Chain Analysis

Diamonds, in the American market, have become a major symbol for love and have

become the traditional gem of choice for engagement rings. The De Beers diamond company

was a key player in the development of the diamond market and in perpetuating the notions

commonly associated with the diamond today. Without this advertising, even the now

traditional American engagement ring would not be so prevalent in the United States (Kempton

and Preez, 1997). A copywriter who worked for N.W. Ayer & Son, an American advertising

firm employed by De Beers in 1938, coined the phrase A Diamond is Forever, and the phrase

was named the best advertising slogan of the twentieth century by Advertising Age Magazine in

2000. This phrase is still used quite often today especially in the common rhetoric of marriage.

De Beers has been successful in controlling every aspect of the diamond market and creating a

popularized view of diamonds.

De Beers is the largest diamond cartel in the world. It is a family of companies that have

monopolized the diamond industry. The De Beers Company flooded the diamond market with

diamonds very similar to that of producers who refused to join their cartel and effectively

eliminated much of their competition. De Beers have also maintained power over the supply of

diamonds, creating an artificial shortage. This scarcity established their control over the price

of diamonds ensuring that the supply would never exceed the demand. The family of companies

is involved in almost every part of the diamond value chain including mining, trading, and retail.

De Beers operates in Botswana, Canada, Namibia, and South Africa. The relationship with

Namibia is a 50-50 joint venture with the Government of the Republic of Namibia though

Namdeb. Namdeb is the largest diamond producing company in Namibia and it is also one of the

companies in the De Beers company family.


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De Beers diamond extractions in Namibia are sold by The Diamond Trading Company.

The Diamond Trading Company is also a participant in the De Beers company family. It is the

rough diamond sales and distribution arm of the De Beers Group. It sorts, values, and sells 40%

of the worlds rough diamonds by value (http://en.wikipedia.org/wiki/De_Beers). Technicians

in London, Kimberley, Windhoek, and Gaborone then sort the diamonds into about 120,000

different classifications for The Diamond Trading Company buyers. The buyers travel to these

cities ten times a year to examine the selection. De Beer also sells their diamonds through its

own retail companies which includes De Beers Diamond Jewellers and Forevermark. De Beers

came to the US in 2007, opening stores in Las Vegas, Houston, Dallas, and McLean, VA. It now

currently has stores in England, France, Ukraine, Russia, Japan, Hong Kong, Dubai, Taipei,

Macau, and the United States.

De Beers engages in off-shore and on-shore mining in Namibia. On-shore mining is done

from raised beaches, pocket beaches and marine terrace gravels. The marine diamond industry is

beginning to grow in Namibia because of an estimated 2 billion carat potential in the Namibian

marine diamonds. In off-shore mining, different mining techniques are used. For water depths up

to fifteen meters, suction hoses are connected to pumps stationed on the beach. For water

depths between fifteen and twenty meters, drivers sweep the ocean floor with suction hoses

connected to pumps on small boats (www.mme.gov.na/gsn/diamond.htm). For water depths

between twenty and one-hundred meters, gravel is lifted in solid drill rods from the ocean floor

by an airlift system to a mining vessel. For water depths greater than one-hundred meters, a

remote-operated seafloor crawler is employed.

Diamond mining causes a direct archaeological impact and extracts the lands natural and

finite diamond resources. Marine mining also disrupts marine life and active rehabilitation of
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the marine life is not possible (De Beers Report to Society 2010). Marine life can inhabit water

that was previously mined but the composition and community structure is different.

Biodiversity is negatively affected by marine mining because it occurs in easily disrupted and

biologically diverse environments.

The De Beers Report to Society 2010 also reported that their diamond mining activities

amounted to a total of 1.46 million tons of carbon dioxide emissions in 2010, 610 tons of sulfur

dioxide emissions from liquid fuels, and large amounts of water usage. Diamond mining uses

large amounts of energy and impacts the worlds climate.

De Beers claims to make worker health, safety and development their top priority but

dangers are still present in diamond mining. Workers may come into contact with hydrofluoric

acid, hydrochloric acid, nitric acid, sodium hydroxide, and/or sulfuric acid. Workers may also

experience exposure to noise, airborne pollutants, and infectious diseases.

The relationship between Namibia and De Beers can be seen as collaboration. Namibia

provides the human capital, labor, raw materials, and natural resources, and De Beers provides

Namibia with jobs, innovation, technology, global sources of capital, and large market access.

De Beers has indirect ownership of the means of production and even exercises power over

Namibias land. Namibia bought most of its mining equipment from South Africa, where De

Beers has wholly owned mining operations. Conflict between Namibia and De Beers can be

detrimental to the state because De Beers provides Namibia with a significant amount of

financial security. Namdeb isa significant contributor to the Namibian economy as the

biggest taxpayer and foreign exchange generator and the second largest employer in the country

(www.debeergroups.com).
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De Beers employees are both male and female, ages 16 and older. De Beers does not

discriminate on the basis of race, color, religion, political view, gender orientation, or social

origin (www.debeersgroup.com). The pay received by the labor force is based on the band and

corresponding salary scale that is pre-defined at a business unit or group level. Where skills are

scarce, salaries may be re-negotiated to ensure De Beers remains

competitive.(www.debeersgroup.com). They provide their employees with benefits including

sick leave, maternity leave, and medical aid. HIV/AIDS is a threat in Namibia to De Beers

employee population, so they provide their employees and their life partners with access to free

anti-retroviral therapy. De Beers also claims to provide employee accommodations and invest

substantially in people and skills (www.debeersgroup.com). All of their mining projects also

have established closure plans and work with their employees during labor transitions and

contribute to the education of their employees post mining to secure long-term sustainability

(www.debeersgroup.com).

The De Beer Company has carefully considered every aspect of the diamond market.

They have controlled everything from creating a diamond market by spending millions of dollars

in advertising to controlling the diamond supply. They exercise power over every step in the

commodity chain of diamonds and a considerable amount of power over the government of

Namibia. At each step of the chain, De Beer has ensured that is stays in their hands

A diamond, in American culture, represents love and commitment. It is the gem of

preference for engagement rings and is increasing in popularity in other ring-types such as in

right-hand rings. It can also serve as a symbol for status or wealth. Generally, the bigger the

diamond is on a wedding ring, the wealthier the person is.
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De Beers has also used capitalism to its greatest potential. It has successfully exploited

the use of land, labor, and the state of Namibia. The interests of De Beers and their laborers will

always be in opposition, and most the services they have provided to their workers and really for

the best interest of the company. Estimates show that De Beers earned a larger percentage of its

profits from Namibia than the percentage of its diamonds mined there (Kempton and Preez,

1997). It has significantly more power than the workers and the state. Namibia is relatively

powerless because it is heavily dependent on the diamond. Some also argue that the

technological contribution of De Beers to Namibia could have be seen as miniscule because it is

mainly concerned with the mining and extraction of diamonds and has made no considerable

contribution to its development.

The success of De Beers indicates a successful divorce of their product from the labor

power invested in its production. Until the 1990s, Namibia was considered a pariah state and

major diamond-consuming countries would have probably found it shocking that it was

advertising a certain culture and meaning to them. De Beers created a lasting impression in the

culture of consumerist America. Americans have found ways of personalizing commodities and

turning commodities into meaningful gifts by attributing some kind of meaning to it, and De

Beers has successfully attributed many of the notions we still have today about diamonds.


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Works Cited

Kempton, D. R., & Du Preez, R. L. (1997). Namibian-De Beers state-firm relations: Cooperation

and conflict.Journal Of Southern African Studies, 23(4), 585.

De Beers. (2010) Retrived November 27, 2011, from Wikipedia website:

http://en.wikipedia.org/wiki/De_Beers

Namibia Diamond Mining. (2011) Retrieved November 27, 2011

http://www.mbendi.com/indy/ming/dmnd/af/na/p0005.htm

Geological Survey of Naminia. (2006) Retrieved November 27, 2011

http://www.mme.gov.na/gsn/diamond.htm

De Beers. (2008) Retrieved November 27, 2011

www.debeersgroup.com
http://en.wikipedia.org/wiki/De_Beershttp://www.mbendi.com/indy/ming/dmnd/af/na/p0005.htmhttp://www.mbendi.com/indy/ming/dmnd/af/na/p0005.htmhttp://www.mme.gov.na/gsn/diamond.htmhttp://www.mme.gov.na/gsn/diamond.htmhttp://www.mme.gov.na/gsn/diamond.htmhttp://www.mbendi.com/indy/ming/dmnd/af/na/p0005.htmhttp://en.wikipedia.org/wiki/De_Beers

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