De Beers has long held a monopoly over the global diamond market, playing controversial roles in African civil conflicts and apartheid regimes. This drew international scrutiny, especially from the U.S. government. In 1945, De Beers was sued by a U.S. court for violating antitrust laws, and over the following decades, De Beers faced multiple legal battles in the U.S. In 2006, De Beers settled with the U.S. government for $295 million to maintain its market share in the American jewelry market. Despite several appeals, all were dismissed by 2012.
By this time, diamond production had globalized. In 2011, Anglo American bought out the Oppenheimer family's stake in De Beers, and the company shifted its operational focus to Botswana. Through its partnership with the Botswana government, forming Debswana, De Beers tapped into high-quality diamond mines like Orapa, Letlhakane, and Jwaneng. De Beers also continued mining in South Africa and Namibia and moved its sighting operations from London to Gaborone, Kimberley, and Windhoek.
The discovery and mining of rich diamond deposits in Russia, Australia, and Canada further eroded De Beers' global dominance. Post-World War II, the Soviet Union sought to meet its industrial diamond needs and discovered major kimberlite pipes like Zarnitsa and Mirny in Siberia. The Soviet government struck a deal with De Beers to sell 95% of its gem-quality diamonds internationally while persuading African allies to continue cooperation post-independence.
After the Soviet Union's collapse, Russia established Alrosa to manage Siberian diamond mining, processing, and trading. De Beers, adjusting its monopoly strategy, initially agreed to sell a portion of Alrosa's diamonds and later partnered to form a new diamond producers association in 2015. Meanwhile, Alrosa also set up its own sales division in Moscow in 1996.
The Impact of New Diamond Discoveries
While collaborating with the Soviet government, African diamond producers began exploring Australia. The discovery of diamond-rich mines like Argyle, controlled by Rio Tinto, positioned Australia as a major player in the global market. De Beers attempted to integrate Australian diamonds into its system, allowing Ashton Joint Venture to sell a percentage of its output independently. However, De Beers' efforts to acquire Ashton's major shareholder failed due to Rio Tinto's countermeasures and the Australian government's opposition.
In Canada, diamond mining from 1992 further challenged De Beers' monopoly. Companies like BHP and Rio Tinto initially dominated, with BHP controlling the high-quality Diavik mine, which became a symbol of "clean" diamonds due to the association of "blood diamonds" with conflict zones. Although BHP once signed a deal with De Beers, it eventually established its own sales channels, significantly impacting De Beers' dominance.
Modern Challenges and the Illusion of "Clean" Diamonds
Despite the diversification of diamond sources and the implementation of the Kimberley Process, significant issues persist. The Kimberley Process is voluntary, and unethical companies can bypass regulations through smuggling and misreporting origins. De Beers, although weakened, still controls a large market share. Alluvial mining remains hazardous and environmentally destructive, resembling a "gambling economy" dependent on luck. Mining camps are plagued by disease, child labor, and harsh conditions, reminiscent of historical exploitation.
Mining disrupts indigenous populations, forcing relocations and altering lifestyles. While mining can boost local economies, its benefits often vanish when mines close, increasing dependency on international mining corporations. Local communities lack the resources to combat these corporations' economic and political power, rendering the concept of "clean" diamonds largely a marketing myth.
Conclusion
The book "Blood, Sweat, and Soil: A Global History of Diamond Trade" illustrates that despite the diversification of diamond production and regulatory attempts, the diamond industry's core issues remain unresolved. "Clean" diamonds, marketed as ethically superior, often mask ongoing exploitation and environmental degradation. The shift in global diamond dynamics has not fundamentally changed the industry's underlying challenges, raising questions about the true cleanliness of so-called "clean" diamonds.