How a single company once controlled nearly the entire global diamond supply
For much of the 20th century, one name dictated the price and availability of the world's most coveted gemstones. Through strategic mergers, aggressive stockpiling, and legendary marketing, De Beers transformed a scattered mining rush into a global monopoly that shaped modern luxury consumption.
Founded in 1888 by Cecil Rhodes and backed by the Rothschild family, De Beers Consolidated Mines began as a way to consolidate various South African mining claims. At its peak, the company's influence was staggering; by the time Rhodes died in 1902, De Beers controlled 90% of global diamond production. This dominance was maintained through a sophisticated mechanism of supply regulation. By negotiating with the London-based Diamond Syndicate, the company could curtail supply during economic downturns, such as the trade slump of 1891–1892, to ensure prices remained high.
The company's era of absolute control was personified by Ernest Oppenheimer, who joined the board in 1926 and led the company until 1957. Oppenheimer understood that diamond value relied on artificial scarcity. He utilized various tactics to protect the market, including flooding the market with diamonds to undermine independent producers and stockpiling surplus stones to prevent price drops. However, this era was not without controversy; the company faced accusations of price fixing and even claims that it restricted industrial diamonds from reaching the US during World War II.
The 21st century brought an end to the Oppenheimer dynasty. In 2011, Anglo American purchased the family's 40% stake for US$5.1 billion, ending 80 years of family control. The company's market share has since plummeted from an 85% monopoly to roughly 25% by 2021. Today, De Beers faces a new existential threat: lab-grown diamonds. By 2025, these synthetic alternatives were reported to be approximately 90% less expensive than mined stones, a massive jump from the 10% price difference seen in 2018, forcing the company to pivot back toward the high-end luxury market.
Source: De Beers
