“A Diamond Is Forever”, A Monopoly is Not.


Tracking the diamond market through the rise and fall of De Beers.


A blood diamond, or “conflict diamond”, as labeled by the United Nations, is a diamond mined in areas controlled by rebel forces, and sold with the purpose of funding military actions against the legitimate government by the given rebel group. The term “blood diamond” originates from the violent civil wars waged in Sierra Leone, The Democratic Republic of Congo, Angola, and other parts of West Africa in the 1990s that were largely funded by these illegitimate gems. Rebel groups controlled diamond mines and sold or smuggled these diamonds to other countries. Then, the diamonds were mixed with legitimate diamonds and sold on the open market. Violence was almost directly funded by the sale of these blood diamonds, as the profits were allegedly used to buy weapons and funded terrorist and rebel activities. According to New York Times, 50,000 people died in Sierra Leone due to the civil war — deaths funded by the $138 million that these diamonds reaped for rebel groups in 1999.

From Cecil with Love

A diamond’s path from an African mine to a Manhattan storefront is a long and markedly historical one. Diamonds were originally so scarce that they existed only in India and Brazil, and were owned only by the richest rulers. However, a diamond rush in the late 19th century in Africa meant two things: diamonds became cheap enough to market to a broader base of consumers, and the emerging market needed to be controlled if it was to remain profitable in the long run. Cecil Rhodes, founder of De Beers, sensed the vulnerability of the new African diamond market and subsequently benefitted from one of the most lucrative monopolies in history.

The Rhodes Colossus is a cartoon of the dark Scramble for Africa period, part of the New Imperialism, depicting British colonialist Cecil Rhodes as a “giant” standing over the continent. It is a drawing reflecting the dangerous ways European colonists perceived themselves.

Rhodes bought up diamond fields as soon as he realized their untapped potential in the last decades of the 1800s. He consolidated smaller groups and came to own virtually all mines in South Africa under the enterprise De Beers Consolidated Mines. The few diamond distributors not owned by Rhodes, joined up with De Beers to create a false scarcity in order to maintain high prices. Under Rhodes, De Beers controlled 90% of all rough diamond production and distribution. After Rhodes’ passing, Ernest Oppenheimer made it truly impossible to deal with diamonds outside of De Beers through the use of exclusive contracts. First, De Beers subsidiaries bought diamonds from producers who got a cut of the total output. Then, De Beers decided if they wanted to sell the diamonds, and at what price. Finally, distribution firms took the diamonds bought from De Beers and sold them in metropoles like New York. The whole process created a one-channel market, with De Beers setting prices at the helm. If producers refused to work within the channel, the De Beers monopoly flooded the market with diamonds similar to the dissenting producers’ product. The monopoly had the distinct ability to do so, given the massive amounts of diamonds it had obtained control of in order to domineer supply.

De Beers did not only manipulate the supply side of the market. The firm significantly influenced consumer demand by launching one of the most successful advertising campaigns in history. In the 1940s, De Beers recognized the quickest way into the American consumer market: love. By equating diamonds with love under the famous slogan “A Diamond is Forever”, the company managed to make love an internationally desired commodity, a commodity that could only be bought as a shiny engagement ring. The bigger the diamond, the bigger the romance—and the bigger the profit. According to The Atlantic, De Beers’ sales in the United States soared from $23 million to $2.1 billion from 1939 to 1979. The advertisement budget rose from $200,000 to $10 million annually. De Beers similarly used marketing to distance itself from criticisms of distributing conflict diamonds. “Ensuring our supply chain is free from conflict diamonds… is critical to maintaining consumer confidence in our industry”, De Beers states on its website. De Beers publicly showed support for the Kimberley Process, a protocol established by the United Nations in 2003 to prevent blood diamonds from entering the legal rough diamond market, in order to maintain consumer support for its ‘legitimate’ diamonds.

Opposition to conflict diamonds in the 21st century has posed a threat to the lucrative diamond market in the West. Some consumer groups do not want to propose to their fiancees with diamonds that has potentially funded violence. Yet, though consumer awareness has had an effect on a stagnating market in the United States, the diamond market continues to grow in China, Japan and other nations. Political intervention is therefore crucial and the 2003 Kimberley Process reflects the needed multilateral commitment. The UN resolution demands member countries to enact certain national legislation, minimum requirements, import and export controls as well as require the implementation of a certification scheme to identify and prevent blood diamonds. In 2019, the Kimberley Process continues to fight against the trade of conflict diamonds, and De Beers staunchly aligned itself with the Process in the 2000s despite criticisms of handling conflict diamonds.

Down but not Out

Despite all its efforts, De Beers could not manage to hold onto its monopoly forever. After a century dominated by the single channel monopoly, countries with large amounts of diamonds themselves, including Russia, Canada, and Australia, refused to cooperate with De Beers leading to a steady decline in market share. The company’s grip on the market was further weakened in 2011 with the sale of De Beers to Anglo American plc. De Beers’ market share is at 37% today, according to a report by Paul Zimnisky, a diamond industry expert, compared to 80% in 1989. The company’s retreat in the market is also reflective of an overall deceleration: the diamond market today faces a slowdown in demand for diamond jewelry, driven by the threat of lab-grown diamonds, and price volatility, according to a report by Bain & Company.

International Diamond Consultants Ltd; Paul Zimnisky analysis.
De Beers’ market share has decreased fairly steadily since 1989.

IBased on the numbers, one might assume that Mighty De Beers’ dodgy practises have faded from the industry; the Kimberly Process ensures diamonds are harvested ethically and the rise of lab-grown diamonds will eventually replace those forged in conflict. However, these assumptions are not necessarily as true as they seem. 

As De Beers launches its new line “Lightbox”, its marketing prowess is once again one step ahead of the game. De Beers sells these laboratory-grown diamonds as fun, light alternatives to a true diamond. Just as De Beers managed to make diamonds rare and precious despite their relative commonality in the 19th century, De Beers once again manipulates the image of laboratory-grown diamonds. Lab grown diamonds are physically, chemically, and optically identical to raw diamonds. Once created, they are unidentifiable from raw diamonds. However, De Beers maintains that they are “neither as valuable or precious” and only markets them for necklaces and earrings. So instead of moving towards the lab-grown diamond market, De Beers uses advertising to keep both their raw diamonds and their lab made ones popular. 

And while the Kimberley Process puts consumers’ minds at ease, the raw diamond trade is still far from peaceful. Diamond mining “feeds off of the desperation of some of the world’s poorest people”, according to the New York Times. 150,000 people work as diamond miners in Sierra Leone according to the same New York Times report. That is roughly 2% of the country’s population, working in an industry that demands hours of labor for below-subsistence pay. “The process is more to sanitize the industry from the market side rather than the supply side,” said John Kanu, an advisor for the Integrated Diamond Management Program. And smuggling illegal diamonds remains widespread despite the Kimberley Process. Just as De Beers refuses to release its stranglehold on the industry easily, so does the industry refuse to release its stranglehold on human livelihood.

Despite the decline of De Beers’ monopoly, the emblem of love remains tainted by  consolidation and conflict. The question consumers must now pose themselves and the diamond market is, how long is forever?


Thediamondloupe.Com. 2019 https://www.thediamondloupe.com/sites/awdcnewswall/files/attachments/De%20Beers%20Market%20Share%20History.pdf.

“Blood Diamond”. 2019. Encyclopedia Britannica. https://www.britannica.com/topic/blood-diamond.

“Conflict Diamonds”. 2019. Debeersgroup.Com. https://www.debeersgroup.com/building-forever/our-impact/confidence/conflict-diamonds.

Friedman, Uri. 2015. “We Buy Engagement Rings Because A Diamond Company Wanted Us To”. The Atlantic. https://www.theatlantic.com/international/archive/2015/02/how-an-ad-campaign-invented-the-diamond-engagement-ring/385376/.

“General Assembly Reaffirms Strong, Ongoing Support For Kimberley Process Targeting Global Trade In ‘Blood Diamonds’, By One Of Four Resolutions | Meetings Coverage And Press Releases”. 2010. Un.Org. https://www.un.org/press/en/2010/ga11039.doc.htm.

“GENERAL ASSEMBLY URGES STATES TO IMPLEMENT MEASURES TO WEAKEN LINK BETWEEN DIAMOND TRADE AND WEAPONS FOR REBEL MOVEMENTS | Meetings Coverage And Press Releases”. 2000. Un.Org. https://www.un.org/press/en/2000/20001201.ga9839.doc.html.

Polgreen, Lydia. 2007. “In Sierra Leone, Still A Tough Dig For Diamonds”. Nytimes.Com. https://www.nytimes.com/2007/03/25/world/africa/25iht-diamond.4.5017895.html.

“The Global Diamond Industry 2017: The Enduring Story In A Changing World”. 2017. Bain. https://www.bain.com/insights/global-diamond-industry-report-2017/.

“What Is The KP | Kimberleyprocess”. 2019. Kimberleyprocess.Com. https://www.kimberleyprocess.com/en/what-kp.

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