De Beers: Diamonds that made history

From diamond miner to monopolist

The origins of De Beers lie in Kimberley, South Africa, where Diamonds were found on the grounds of the De Beer brothers' farm in 1866. A sensation that spread like wildfire and attracted diamond seekers from all over South Africa. They began digging uncontrollably, whereupon De Beers forcibly sold their farm and left the area. The land was then divided into mining fields, which were auctioned off to diamond seekers. However, after initial sensational findings, these soon reached their technical limits. Individuals were unable to cover the capital expenditure required to dig even further into the depths and the mine was closed.

The resourceful businessmen Cecil Rhodes and Barney Barnato recognized the opportunity and bought up the individuals' almost worthless mining rights. Initially, the two competing diamond companies operated, but then decided to join forces and consolidate the companies. De Beers Consolidated Mines Limited was founded and quickly grew into the world's leading diamond producer.

A Diamond Is Forever

In the early years, De Beers focused on increasing the supply of diamonds by consolidating diamond mines in South Africa and developing new mining techniques. In the 1930s, De Beers launched a marketing campaign to promote diamonds as symbols of love and commitment. The campaign was intended to boost demand for diamonds, which had declined due to the global economic crisis. De Beers introduced the concept of the “diamond engagement ring” and popularized the idea that a man should spend two months' salaries on a diamond ring for his fiancée. This marketing campaign was very successful and was finally crowned with the already mentioned slogan “A Diamond Is Forever.”

The De Beers brand

In the following decades, De Beers continued to expand its activities and invested in new mines all over the world. At the beginning of the 20th century, the company controlled up to 90% of the world's diamond supply. However, in the 1990s, De Beers' market share began to decline as new diamond producers and synthetically produced diamonds appeared and competition in the sector increased. In response, De Beers began focusing on branding and marketing to maintain its competitive position. This included marketing the “right-hand ring” for single women, which is intended as a symbol of their independence and independence.

Today, De Beers is still a major player in the diamond industry, but no longer the dominant force that the company once was. The Group is now majority-owned (85%) by Anglo American, a multinational mining company and covers the entire diamond value chain: Starting with production (which also includes synthetic diamonds), through refining and distribution. Among other things about the own brand De Beers Forevermark.

Famous diamonds from De Beers

Over time, the mines of De Beers have many famous and precious diamonds produced. Some of the most well-known include:

1. Golden Jubilee

De Beers found the original 755.5 carat rough diamond, which later became the Golden Jubilee, in 1985 at the Premier Mine in South Africa. Today, at 545.67 carats, it is the largest cut diamond in the world. Despite its size, the Golden Jubilee Diamond lived a shadowy existence for a long time, which was due to its yellow-brown color, which was considered by many to be unsightly. De Beers finally made the decision to use the Golden Jubilee to test new grinding methods and tools, and the result was a beautiful stone that is now part of the Thai Crown Jewels.

2. Pink Star

The “Fancy Diamond” was mined, cut, ground and polished by De Beers in Botswana, Africa in 1999. It is considered the most expensive diamond in the world to date and was auctioned off in 2017 for 71.2 million dollars.

3. Centenary

It is the fourth largest diamond ever found in De Beer's Premiere Mine in South Africa. The rough diamond originally weighed 599.10 carats. After complete grinding and polishing, the exceptionally pure diamond weighed 273 carats. Due to its unique characteristics, the value of the Centenary is currently estimated at up to 100 million euros.

Diamonds as a timeless investment

Of course, very few private investors are likely to have the financial means to deposit millions of dollars in diamonds. But there are also ways to make a “solid” and predominantly inflation-proof investment in investment diamonds with less capital. This is because diamonds are tangible assets that, due to their natural scarcity and at the same time high level of desire, are stable in value and also have attractive potential for price increases. Since no major diamond deposits have been discovered or developed for decades, The management consultancy Bain assumes that the production of natural diamonds will fall or at best remain stable. Especially colored “Fancy” diamonds are currently very popular, but at the same time they are particularly rare and therefore expensive.

However, investors who want to invest in fascinating diamonds should bring a great deal of expertise - in addition to several thousand euros - in order to be able to assess the value of a stone. The 4C quality criteria play a role here: color, clarity, cut and weight (carat). Therefore, each gemstone should be individually tested by experts and bring a certificate of authenticity (e.g. from GIA).

For investors who do not own a stone (and therefore store them extensively), but only want to take advantage of return opportunities, it is recommended digital shares. Starting at just 500 euros, Finexity investors can purchase first-class, tokenized shares of diamonds, which have been selected and checked by experts.