Wednesday, March 13, 2013

This Day in History: Mar 13, 1888: De Beers Consolidated Mines Ltd. is founded


Cecil Rhodes, the founder of De Beers, got his start by renting water pumps to miners during the diamond rush that started in 1871, when an 83.5 carat diamond was found on Colesburg Kopje (present day Kimberley), South Africa.

He invested the profits of this operation into buying up claims of small mining operators, with his operations soon expanding into a separate mining company.[6]

He soon secured funding from the Rothschild family, who would finance his business expansion.[7][8] De Beers Consolidated Mines was formed in 1888 by the merger of the companies of Barney Barnato and Cecil Rhodes, by which time the company was the sole owner of all diamond mining operations in the country.[6][9][10]

The name derived from the De Beers brothers, Diederik Arnoldus and Johannes Nicholas de Beers, Boers whose farm had become the site of a particularly lucrative mine, although they'd sold the claim and had no involvement with the company that came to bear their name. In 1889, Rhodes negotiated a strategic agreement with the London-based Diamond Syndicate, which agreed to purchase a fixed quantity of diamonds at an agreed price, thereby regulating output and maintaining prices.[8][11] The agreement soon proved to be very successful—for example during the trade slump of 1891–1892, supply was simply curtailed to maintain the price.[12] Rhodes was concerned about the break-up of the new monopoly, stating to shareholders in 1896 that:[8]

Source: via Juan on Pinterest

The Second Boer War proved to be a challenging time for the company. Kimberley was besieged as soon as war broke out, thereby threatening the company's valuable mines. Rhodes personally moved into the city at the onset of the siege in order to put political pressure on the British government to divert military resources towards relieving the siege rather than more strategic war objectives. Despite being at odds with the military,[13] Rhodes placed the full resources of the company at the disposal of the defenders, manufacturing shells, defences, an armoured train and a gun named Long Cecil in the company workshops.[14]

In 1902, a competitive mine named the Cullinan Mine was discovered; however its owner refused to join the De Beers cartel.[15] Instead, the mine started selling to a pair of independent dealers named Bernhard and Ernest Oppenheimer, thereby weakening the De Beers cartel.[16] Production soon equalled all of the De Beers mines combined, as well as yielding the largest rough diamond ever discovered, the Cullinan Diamond. Ernest Oppenheimer was appointed the local agent for the powerful London Syndicate, rising to the position of mayor of Kimberley within 10 years. He understood the core principle that underpinned De Beers success, stating in 1910 that:[15]

During World War I, the Cullinan Mine was finally absorbed into De Beers. When Rhodes died in 1902, De Beers controlled 90% of the world's diamond production. Ernest Oppenheimer took over the chairmanship of the company in 1927, after buying a seat on the board a year earlier.[16]


Oppenheimer was very concerned about the discovery of diamonds in 1908 in German South West Africa, fearing that the increased supply would swamp the market and force prices down.[4][5]

Former CIA chief, Admiral Stansfield Turner, claimed that De Beers restricted US access to industrial diamonds needed for the country's war effort during World War II.[17]


De Beers Timeline

1866 Eureka! Erasmus Jacobs, a 15-year-old farmer's son, finds Africa's first authenticated diamond near the Orange River.

1869 The Star of South Africa, an 83.5 carat rough diamond, is discovered by a Griqua herdsman. It triggers the first diamond rush.
1870 Cecil Rhodes, 17, arrives in South Africa. He sells ice to miners in the hot African sun and saves his money.
1871 The De Beers Mine is discovered in May, and the Kimberley Mine in July. The latter would become the world’s richest mine for nearly a century.
1873 Barney Barnato, 18, joins his brother at the Kimberley digs. Meanwhile, Cecil Rhodes buys a claim.
1874"Barnato Brothers Dealers in Diamonds and Brokers in Mining Property" opens for business.
1887 Cecil Rhodes and Barney Barnato, each buying claims and shares in nearby mines, vie for commercial pre-eminence at the Kimberley diamond fields. To out produce each other, they flood the market causing diamond prices to plummet. A merger is the only solution.
1888 De Beers Consolidated Mines Limited is established on 12 March. Rhodes is named founding chairman.
1890 Ten merchants form the London Diamond Syndicate, and agree to buy De Beers' entire production.
1897 Barney Barnato dies tragically when he falls from the SS Scot en route to England.
1899 Within days of the outbreak of the second Boer War, the town of Kimberley is besieged. It remains under siege, its mines closed, for 124 days.

1902 Cecil Rhodes dies at his cottage at Muizenberg, aged 48. Before his death, he's heard to say, "So little done, too much to do." The same year, Ernest Oppenheimer arrives in Kimberley to work as a diamond buying agent. He and Rhodes never meet. The Premier Mine, near Pretoria, is discovered. It will ultimately produce a higher number of large gem diamonds than any other mine.

1905 The Cullinan diamond is discovered at the Premier Mine. At 3,106.75 carats it is the largest rough diamond ever found. 
1914 The outbreak of war causes the suspension of all mining at De Beers’ properties. The Kimberley mine never re-opens.
1917 Ernest Oppenheimer founds the Anglo American Corporation to develop gold mining in South Africa.
1926 Sir Ernest Oppenheimer, knighted for his wartime efforts, is elected to the De Beers Board after Anglo American, the company he founded, becomes a major De Beers shareholder. Sir Ernest would become chairman in 1929.
1928 Diamond cutting comes to South Africa when we open our first African cutting factory in Kimberley.
1932 As the Great Depression deepens, demand for diamonds dries up. De Beers closes all its mines.
1934 Harry Oppenheimer, son of Sir Ernest, joins the De Beers Board.
1939 Harry heads for New York to kick-start De Beers’ pioneering diamond advertising campaign.

1940 World War II engulfs Europe. All De Beers’ mines close for the duration. In Tanzania, Dr John Williamson, a Canadian geologist, establishes The Williamson Diamond Mine, later famous for its fine pink diamonds.
1941 Diamond Trading Company offices in London are destroyed in the Blitz. The operation temporarily moves to Berkshire.
1947 Frances Gerety, a young copywriter at the N W Ayer advertising agency, creates the timeless slogan, “A diamond is forever”. Fifty years later, it's recognized by Ad Age as the greatest advertising slogan of the 20th century. That same year, King George VI and Queen Elizabeth, and the Princesses Elizabeth and Margaret, visit Kimberley.
1957 Following the death of his father, Harry Oppenheimer succeeds Sir Ernest as Chairman.

1966 Kimberlite, the tell-tale diamond-bearing ore, is discovered by De Beers’ prospectors in Northern Botswana.
1967 A year after Botswana gains its independence from Britain, the Orapa kimberlite pipe is discovered. The second largest pipe in the world, it covers 262 acres at the surface.
1969 We join with Botswana to establish Debswana, a 50:50 partnership to develop Orapa. Production begins in 1971.
1972 The Botswana desert gives up more riches when De Beers’ geologists discover the Jwaneng pipe, hidden 150 metres below the surface. It is the world’s richest diamond mine, producing an average of 11 million carats per year.

1982 Production begins at Jwaneng Mine in Botswana.
1988 In our centenary year, we unveil the Centenary diamond. 
1992 Venetia Mine opens in South Africa. It will become South Africa’s largest diamond mine.
1994 De Beers joins with the newly independent Republic of Namibia to form Namdeb - a 50/50 joint venture partnership to mine the country’s diamonds. 
1995 Highlighting the role of diamonds in marking life’s occasions, our iconic "Shadows" campaign is launched in America.
1998 Nicky Oppenheimer becomes chairman of De Beers. That same year, we begin the development of diamond inscribing technology that would end up being the forebear of Forevermark.
1999 Nelson Mandela meets Harry Oppenheimer in London. After Harry's death, in 2000, Mr. Mandela will eulogize him for his strong voice against apartheid, praising him for helping to build and develop South Africa while fighting for justice and freedom.

2000 With the 203.04 carat De Beers Millennium Star, we welcome the new millennium.
2001 We partner with luxury group LVMH Moët Hennessy Louis Vuitton in a new company, De Beers Diamond Jewellers, to provide the world’s most discerning customers with the world’s most beautiful diamonds. 
2003 The Kimberley Process Certification Scheme is established to stem the flow of conflict diamonds. 100% of De Beers’ diamonds are certified conflict free.
2006 With the Government of Botswana we establish DTC Botswana, a company to sort and value all Debswana production and support local diamond manufacturing. By 2013 all our diamond sales will be based in Botswana.
2008 Rare, beautiful and responsibly sourced, Forevermark is launched in select countries. 
2011 Anglo American, shareholders in De Beers since 1926, and the Oppenheimer family announce an agreement for Anglo American to acquire the family’s share in De Beers. 
2012 De Beers becomes a member of the Anglo American plc group.
taken from:  & [13.03.2013]

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