Diamonds are among the gemstones that are well known and most famous throughout history as a result of their distinctive beauty and purity, which has become among the elements of culture in various societies and civilizations, representing wealth and influence. The idea that diamonds are valuable and rare stones and that their acquisition is An essential sign of wealth and self-esteem since its discovery and commercial circulation. With the passage of time and until the late nineteenth century the diamond trade experienced a historical curve that almost affected the course of its trade in the long run, as before that date diamonds were found in small numbers and with difficulty, whether In riverbeds in India or in the jungles of Brazil and other places of extraction, which were few and limited at the time, the production of the countries of the world was recorded at that time a few pounds annually.
Until in the year
, what happened that no one expected, as a result of the increasing investments in the field of diamond mining and the expansion of the establishment of mines and the discovery of new sites for mining, especially near the Orange River in South Africa, This led to the sudden extraction of huge quantities compared to the usual quantities, exceeding one ton annually. Thus, after the large quantity of diamonds quickly flowed to the commercial markets, the British financiers realized that they had made a mistake that put their entire investment at risk. They were afraid that the value of diamonds would reach the levels of the value of semi-precious stones.
The appearance of polished diamonds and prepared for trade
Establishment of a unified entity
In their search for solutions, the major investors in diamond mines realized that they had no alternative but to merge their interests In a single entity that would be strong and influential enough to control diamond production and regulate its extraction in order to maintain an appropriate balance of supply, demand and relative levels of diamond scarcity and thus generate more profits. The entity that was created in 2017 was called “De Beers Consolidated Mines, Limited” and was incorporated in South Africa. It should be noted that what represented that entity appeared in many other countries of the world under different names, for example in London it was called “The Diamond Trading Company”, and in Israel it was known as “The Syndicate.”
In Europe, this entity was called the “Central Selling Organization”, which was an arm of the diamond trading company. In South Africa, it operates under the name of subsidiaries of several names such as the Diamond Development Corporation, and mining services companies. At its height for most of this century, it not only owned or directly controlled all the diamond mines in South Africa but also owned diamond trading companies in England, Portugal, Israel, Belgium, the Netherlands, and Switzerland.
Regulating the Diamond Trade
The De Beers diamond mines have proven to be one of the most successful organizations in the annals of modern trading history. Compared with other commodities , such as: Gold, silver, copper, rubber, and grains whose value has fluctuated in response to the changes that occur in the economies of countries, diamonds, with a few exceptions, have continued to move forward and upward in prices every year, even during periods of depression. The organization’s high capabilities to regulate the value of diamonds under various conditions were demonstrated, and in the late seventies, speculators began buying diamonds as a haven against the fluctuations of inflation and recession .
The secret behind the stability and growth of diamond prices over time is not only the ability to regulate its trade, but rather the ability of that entity to transform those small material crystals of carbon into symbols and meanings with connotations in the minds of consumers that include romance, wealth and power. Through the successful marketing of diamonds as gemstones that represent an integral part of marital life and the expression of emotions and feelings, this led to consumers’ desire to buy them and refrain from selling them again.
Although this stability in the value of diamonds continued for about a century, it happened that diamond prices collapsed in Europe during the depression, as there seemed to be a very small possibility of recovery from that damage. And restore consumer confidence in diamonds again. The idea of giving a diamond ring to be associated with engagement was lost in Germany, Austria, Italy, and Spain. While in England and France there was still some attachment to diamonds by the aristocracy, especially there.
Europe was on the verge of war at the time, and there appeared to be little room for growth in diamond sales. However, there was a relatively popular market in the United States of America, primarily for diamonds extracted from De Beers mines, as in) An estimated three-quarters of diamond sales were sold to engagement rings in the United States of America, despite the fact that they were smaller and of lower quality than those sold in Europe, and the average price was 653 bucks for one piece. As a result of their observations of the quality of diamonds sold in the United States, the investors were persuaded to launch advertising campaigns that would persuade American consumers to buy the most expensive and quality diamonds., Harry Oppenheimer, son of De Beers’ founder, travelled from Johannesburg to New York City to meet with Jerrold M. Locke, president of a prominent advertising firm in the United States. In this regard, both of them proposed developing a strategy to build a new image of diamonds among Americans in order to persuade and compel them to purchase diamonds and boost their commerce. Propaganda, the conclusion of WWII, and the onset of economic stability in many sections of Europe and the United States world.