The Diamond Empire: DeBeers & Oppenheimer Family’s Cartel – Artificial Scarcity

Well what I learned was that the diamond business wasn’t a business of extracting, as I originally expected – something of enormous value, and them simply seeing how much of this object you could get out of the ground, and selling it. That was what the business appeared to be when I started my venture. But their real business was restricting what came out of the ground, restricting what was discovered, restricting what got cut, restricting what actually found its way into the retail market. And at the same time, through movies, through advertising, through Hollywood, through the manipulation of perceptions – creating the idea that there was this enormous demand for these shiny little objects…

Because it is a virtual monopoly, DeBeers cannot operate legally in the United States. All site holders must travel here to buy their rough gems, to a building known only as Charterhouse Street. This is a fortress where 80% of the world’s diamonds gem diamonds are sorted, grated, and sold.

What makes this cartel different is it’s controlled by a single company. A single commercial organization, and that’s DeBeers. And DeBeers itself is controlled by another South African company Anglo American. Interestingly, Anglo American is controlled by DeBeers. And that interlocking ownership is what allows one small family company,E. Oppenheimerand Sons, who own just a small shareholding in Anglo American, to control the whole edifice.