De Beers’ eventful history

Where did the De Beers story start?

Just like the diamond had to complete a very long journey, around 150 km from the earth’s crust to the jewel you purchase, diamond giant De Beers also had to complete a real trajectory. Although their history obviously didn’t start 3.3 billion years ago. And even though their story on their own website starts in 1988, we will go back to the year 1870 for the very start of the De Beers story.

This year is when the 17 year old Cecil Rhodes, a British vicar’s son with heart and lung problems, left for South Africa. His brother Herbert owned a cotton plantation in the Cape Colony, which was in British hands from 1814 to 1910, where Cecil could come and work. However, the country was unsuitable for cotton and the plantation therefore wasn’t a success.

Fortunately South Africa had other advantages. After all, diamonds were discovered here in 1866. It was the 15 year old Erasmus Jacobs who found a white stone near the Oranjerivier. As no one in his family realised this was a diamond, the boy used it as a toy. A friend of their neighbour came to the realisation that his toy was actually a 21.25 carat diamond at a much later stage.

This stone went down in history as the Eureka diamond. The Governor of the British colony, Sir Philip Wodehouse, was able to buy the diamond and presented it to Queen Victoria. The Eureka diamond was first exhibited in London in 1867 and subsequently cut into a 10.73 carat brilliant.

Fun fact: The Eureka diamond returned to South Africa exactly 100 years after it was first found, where you can still admire it today in the Big Hole Museum near Kimberley. It’s a popular tourist attraction, where visitors can go underground in a reconstructed mine shaft and learn more about the diamond’s history.

How did things go with the Rhodes brothers?

Now back to the Rhodes brothers. They were also hit by diamond fever and decided to try their luck in Kimberley (at the time still called New Rush) in 1871. They earned a fair bit of money there with the rental and sale of water pumps. Cecil even managed to produce and sell ice cream to the miners. And with a large share of his income he started to invest in mining like a real businessman.

Cecil returned to his birth country in 1873 to continue with his law studies at Oxford University. He was influenced by colonial ideas and increasingly developed his fanatical imperialist ideology. Professor John Ruskin particularly made an indelible impression on him with his inaugural speech.

In this speech he said, amongst other things, “Are you, the young people of England, planning on turning your country into a royal seat for kings again? A majestic island, a source of light for the entire world, a centre for peace, a seat for science and arts, a country which everyone looks at with jealousy? What England needs to go to stop from going under is set up colonies!”

We can certainly say these words were decisive for Cecil’s life course. He was convinced of the fact the British people were the most important people in the world and that all mankind would benefit from an expansion of the British Empire. His political agenda therefore included the reconquering of the United States and allowing the Union Jack to wave in South Africa.

How did the diamond market evolve in the meantime?

Cecil Rhodes’ ill health meant it was impossible for him to stay in England for a long period of time. He therefore regularly travelled back and forth between Oxford and South Africa until he graduated in 1881. However, he definitely wasn’t resting on his laurels during his visits to South Africa. The young businessman systematically started buying up farmers’ fields from 1880. This included the field at the Oranjerivier which belonged to the brothers De Beer. The brothers had already found diamonds on their field, but weren’t interested in these as pious Christians. They didn’t want to get carried away by the diamond fever and decided to sell their land.

As the diamonds were literally there for the taking, overproduction occurred and the diamond market collapsed. At that time you could buy a diamond for the same price as semi-precious stones like Topaz or Turquoise. Many mine owners were barely surviving, which Rhodes managed to take advantage of.

During that same period there were around 1600 individual claims in the Kimberley mine. Rhodes decided to buy various different claims in the Kimberley mine together with his business partner Charles Dunell Rudd. The pair had become friends in 1872 and Rudd had always looked after their affairs in South Africa during Rhodes’ study period in Oxford.

We certainly shouldn’t forget to mention the fact that the First Boer War broke out in 1880, the war for freedom between the Boers (farmers) and the British Empire and Transvaal demanded independence. However, this was ‘only’ a precursor to the Second Boer War, which was much more intense and during which both Rhodes and the diamond played a much more significant role.

When did the De Beers empire start to take shape?

The fact that 1880 was an eventful year is beyond dispute. Not least for Rhodes himself, who founded his ‘De Beers Mining Company’ business during that year, named after the brothers De Beer’s field and also launched his political career. He became a representative for the Barkly West constituency and successfully pleaded for the colonisation of Beetsjoenaland (which later became Botswana).

And his dreams about expanding the British Empire? His dreams turned into effective plans which he managed to realise in part. His business partner Rudd signed a treaty with the Matabele King Lobengula in 1888, allowing him to dig for minerals in Matabeleland and Mashonaland. In reality this was the start of the colonisation of Rhodesia, the country which Rhodes had decided to name after himself.

On location: the area was given self-government in 1923-1924 and became the British colonies of Northern Rhodesia, now Zambia, and Southern Rhodesia, the current Zimbabwe. The Cape Cairo railway, a railway line from the South African Cape Town to the Egyptian Cairo, which he had always dreamed of, remained an unfinished project. Partly as a result of the two Boer Wars and the World Wars.

The year 1888 therefore also appeared to have been an eventful year. This is the year when Rhodes also bought the diamond company from his rival Barney Barnato, the Kimberley Central Diamond Mining Company. He merged the two companies under the ‘De Beers Consolidated Mines’ name, which certainly resulted in a stabilisation of the diamond market.

The same couldn’t be said of his political career ... Cecil Rhodes became the 7th Prime Minister of the Cape Colony in 1890 and he accepted the Glen Grey Act. This was a law which restricted any land owned by indigenous Africans and was considered to be the forerunner of Apartheid.

How did Rhodes miss out on the Transvaal riches?

The relationship between the Boers and the Brits remained extremely tense. The ‘foreigners’, mainly British migrant workers, were being discriminated against and the Brits planned an invasion at the end of 1895 to end this once and for all. The actual reason for the attack was naturally the riches on offer in Transvaal.

The mastermind behind the operation was no one other than Cecil Rhodes. However, the invasion, known in the history books as the Jameson Raid, was unsuccessful. Rhodes had underestimated how disgruntled the foreigners were and therefore couldn’t count on them. The Boers also appeared to know about the arrack and were waiting for the Brits with heavy artillery.

This failed coup in Transvaal is sometimes referred to as the reason for the Second Boer War, which lasted from 1899 to 1902. Rhodes wasn’t able to leave the besieged Kimberley for six months during this war. He therefore fully focussed on his diamond company, with which he already controlled 90% of the global diamond production at the time.

What happened to De Beer after Rhodes’ death?

Cecil Rhodes hadn’t just magnified his empire during this time, he had also secured it. He founded ‘The Diamond Syndicate’ for this purpose between July 1890 and January 1896. This allowed for the diamond stocks and diamond prices to be monitored. In other words: he could create scarcity and subsequently keep diamond prices artificially high.

In the last years of his life he managed to double his assets. He died of a heart attack in 1902 at the age of 48. But De Beers continued to exist and continued to grow. In fact: the company worked together with GIA in 1939 in order to develop a standard for the quality of diamonds. The 4C’s were a fact from that point onwards!

A year later, in 1940, both companies worked on a campaign together to stimulate diamond purchases. Robert M. Shipley, founder of GIA, tasked Gladys Babson-Hannaford (who worked for the De Beers advertising agency) with travelling around the country to explain to jewellers how they should discuss the 4C’s with their customers.

The American advertising agency N.W. Ayer (which Babson-Hannaford worked for) came up with a slogan in 1947 which didn’t just stimulate diamond purchases, but is still well-known throughout the world today. The ‘A diamond is forever’ slogan was depicted on engagement ring photographs, resulting in American women only being satisfied with engagement rings which also featured a diamond.

Sales were on the up as a result of the emphasising of the diamond as an unbreakable symbol of eternal love. Perhaps Cecil Rhodes may have been better off dreaming of winning hearts, rather than conquering countries and people?

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