The Gem of the Diamond Industry–De Beers
A single company has controlled the diamond industry for more than a century: De Beers. In mid-1980s, the company produced more than 90 percent of the world's diamonds.
Since then, rival producers have entered the market, but in 2003, De Beers was still able to command $5.5 billion in diamond jewelry sales, control about 50 percent of the world's diamond mines, and value 70 percent of the world's annual supply of rough diamonds through its subsidiary, the Diamond Trading Company (DTC). In addition to the diamonds that De Beers excavates from its own 20 mines in South Africa, Namibia, and Botswana, it purchases diamonds in the market. Many people believe that this practice creates an artificial supply scarcity, which produces the perception of diamond rarity and may support De Beer's ability to demand premium market prices for diamonds.
Diamonds have long held a certain mystique, thanks in large part to De Beers' skillful marketing efforts. Before the 1930s, diamond rings were rarely given as engagement rings: Opals, rubies, sapphires, and turquoise were deemed much more exotic gems to give as tokens of love. De Beers changed the world diamond market with its 1947 launch of its "A Diamond Is Forever" campaign. The company's wildly successful advertisements connected diamonds to romance, convinced women that diamonds represent an eternity of love, and convinced young men that spending "two months' salary" for a ring was the ultimate way to show affection. Now, 1.7 million diamond engagement rings are sold in the United States each year, and 85 percent of all American women own at least one diamond.
Would you still admire the glitter of a diamond if you knew that it is merely carbon in its most concentrated form? That's right–a diamond is merely carbon, the element that makes up 18 percent of the human body and is one of the most abundant elements in the world. What's different about diamonds, however, is that they are formed 100 miles below the Earth's surface. At that depth, the molten rock of the Earth's mantle provides just the right environment to transform carbon into diamonds: Pressure is at least 435,113 pounds per square inch, and the temperature is above 750 degrees Fahrenheit. If conditions were to drop below either of these two points, graphite would be created.