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Diamond Industry is Infused with Colorful European Key Players

In an attempt to escape religious persecution, refugees from the Netherlands and northern Europe helped to establish the burgeoning diamond industry in South Africa. These Afrikaners, or Boers, were farmers who lived in the Cape of Good Hope, which was administered by the Dutch East India Company. They were just the first of many colorful Europeans to make their mark in this business of fire and ice.

Contending with native hostility, groups of Afrikaners later moved north to the Northern Cape seeking the "quiet sweet life." Here, three of South Africa's richest diamond mines were started - the Kimberley Diamond Mine, Premier Diamond Mine and Venetia Diamond Mine. After facing further hostility with the native Zulu tribe, these Europeans were eventually able to settle the Natalia Republic or Boer republics.

Encroachment from the British soon shook things up again. They seized the Cape of Good Hope from the Dutch East India Company to use as a stopping off point on the sea route between Australia and India. The unfriendly overture lead to the First and Second Boer Wars, which ended with the inclusion of the Boer territories into British colonies. A new wave of emigrants from England soon joined the "mineral revolution" in search of their fortune.

Cecil Rhodes was among them, but he came to South Africa not in search of diamonds, but to sell goods to the diamonds workers. His illustrious career began by selling ice cream and later steam-powered water pumps used to drain the mine pits at Kimberley. However, things took a turn when a group of mining syndicates merged with Rhodes' pump company to form the De Beers Consolidated Mines. Today, Rhodes is considered the undisputed father of the diamond mine industry.

Meanwhile, a fellow Englishman, Barney Barnato, was busily buying up sections of the Big Hole in Kimberley to form the Kimberley Central Mine, which became, along with De Beers, South Africa's largest mining interests. Cecil Rhodes was eventually successful in convincing Barnato to merge his mine with De Beers. The merger made Barnato one of the richest men in the world. Sadly, he met his untimely death in a fall overboard a passenger ship back to England.

Founder of the Premier Diamond Mine, Sir Thomas Major Cullinan was a successful businessman and amateur geologist. His mine is best known for the discovery of the world's largest diamond. The Cullinan Diamond weighed an amazing 3,106 carats. Attempts by De Beers to purchase the mine were rejected by Cullinan. However, the breakout of World War I brought about economic hardships for the mine, causing Cullinan to sell a major share in Premier to the Transvaal government. In turn, De Beers convinced the government to sell its controlling interest, placing De Beers at the top of the South African diamond monopoly yet again.

Born in Friedberg, Germany to a large Jewish family, Ernest Oppenheimer grew up in a family well familiar with the diamond industry, having several brothers who worked for the diamond syndicate. Beginning his career at a diamond brokerage firm in London, Oppenheimer is credited with having created the method of "single-channel marketing" which funneled the world's supply of diamonds through a single clearing house.

After gaining control of Namibia's diamond mines, Oppenheimer formed the Anglo American mining conglomerate, which provided him the financing power to gain the position of chair at De Beers. Today, the Anglo American operates a fleet of diamond recovery ships in South African under the De Beers Consolidated Mines Limited and Central Holdings Limited, an Oppenheimer family holding company.

Born in Uzbekistan, Lev Leviev, an Israeli national, established the Lev Leviev Group, the largest cutter and polisher of rough diamonds. Leviev's operations own mining interests in Nambia and manage factories in Armenia, India, Israel, and the Ukraine. He also formed a partnership with ALROSA, an ex-Soviet state-owned diamond firm. In a bold move, ALROSA has circumvented the De Beers diamond supply chain, and sells directly to Russian cutting factories owned by Leviev. As a result, the company produces 100 percent of Russia's rough diamond output and nearly 20 percent of the world's rough diamonds.

Seed Newsvine

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