Diamond Industry Analysis Essay

For centuries, diamonds have been regarded as one of the most valuable commodities in the world and the industry has evolved into billions of dollars. At the top, De Beers dominated the entire industry worldwide, from exploration to retail selling. However, it has a reputation of a monopolist, where it influences supply and demand. The two critical factors that De Beers carefully maintained throughout the century to remain in monopoly was to create the illusion of the scarcity of the diamonds and to keep the prices high. Realizing the benefits of the cooperation and the dangers of the oversupply, most

The process of producing the diamonds so they could be sold on the market involved many steps which were illustrated in the movie, Blood Diamond. Smugglers like Archer would supply the RUF with guns. The guns would be used by the RUF to intimidate the people of Sierra Leone into working as laborers for them, we see this with Solomon and his son. These men would be forced to dig in the water mines for hours a day searching for diamonds of all sizes. Then the diamonds are mixed with other diamonds all around the world, mixing the illegal ones with the legal ones; this was explained in the movie by Archer to Maggie. When the diamonds are mixed in with the others, no one can determine for certainty where each originated from. It is then distributed to nations where they are made into necklaces and bracelets, and no questions are asked.

Close to 49% of diamonds are coming from Central and Southern Africa. Also sources of the mineral have been discovered in Canada, India, Russia, Brazil, and Australia. They are mined from kimberlitic and lamproite volcanic

The diamond cartel has been in existence for over a hundred years. (Spar: 2006) It has faced many issues in order to survive and prosper. (Kretschmer: 1998) Rhodes’ method was sufficient during the early 1900s. (Spar:2006) By 1930, the price of diamonds had fallen and the war was looming; Europeans were not interested in buying diamonds. (Epstein: 1982) It changed ownership to the Oppenheimers around about the Great Depression. Thus began the exploitive marketing tactics of the 20th century. (Epstein: 1982)

South Australia’s largest exporting group is mining, this includes a variety of merchandises consisting of uranium, copper, gold, silver, iron ore, graphite, zinc, and zircon. Mining makes an estimated 40% of South Australia’s exports and has increased its recognition within less than 10 years. The State

Diamond revenues also contribute to finding ways to fight as HIV/AIDS. Africa has long dealt with the HIV/AIDS crisis so revenue from diamonds would help healthcare in Africa all-around. The revenue also helps provide low-cost healthcare, more available facilities and clean water, which means lower infections being spread and longer life expectancy. The diamond industry also provides many jobs for the citizens in Africa. Jobs that people are employed in mining, cutting, and diamond manufacturing. These employment opportunities allow thousands of Africans to make money, get healthcare, and provide education for their children.

Company have approximately 110600 employees globally. It has total assets of $103 billion which is more than Coca-cola and other dominant companies.

The economic principals discussed in this article are mainly focused on the fact that until 2000, the diamond industry was a monopoly. A monopoly, as defined by our book, has one firm, a unique product, and the entry into the market is blocked. The owner of the diamond industry, Cecil Rhodes, created this by buying all the available diamond mines. He started in 1870’s by buying the mines found in South Africa. As time went on,

The De Beers Group of Companies established itself in the diamond industry in the late 1800’s and it was only a matter of time until De Beers owned virtually every diamond mine in South Africa. Diamond distributors joined up with De Beers because of similar interests: they wanted to create a scarcity of diamonds, so that high prices would follow. Eventually, De Beers would establish exclusive contracts with suppliers and buyers, making it impossible to deal with diamonds outside of De Beers. For the remainder of the 20th century, the business model was the same: A subsidiary of De Beers would buy the diamonds and De Beers would determine the amount of diamonds they wanted to sell, and at what prices. In turn, De Beers funneled all of the

The story of these infamous diamonds all started with a fifteen year old who found a diamond in his father 's arm. The diamond business started in 1935 when “De Beers” took all control over dining prospects in Sierra Leone. De Beers are a group of companies has a main role in the exploration of diamonds, as well as diamond mining, diamond retail, diamond trading, and industrial diamond manufacturing sectors.This group was founded in 1888, and they are responsible for the problems Sierra Leone is facing today. These diamonds can be found in volcanic pipes. Diamonds are a pure form of carbon in a transparent state. Diamonds have always been a sign of wealth. Historically kings and queens were known for wearing these. Over time many people began lusting over them.

The distribution and production of diamonds is largely controlled by a few key players, the main one being Antwerp. Antwerp is where 80 percent of all rough diamonds, 50 percent of all cut diamonds, and 50 percent of all rough, cut and industrial diamonds are controlled. In New York almost 80 percent of the world diamonds are sold. De Beers is the world’s largest diamond miner and holds a governing position in the industry, and has done so since it was founded in 1888. De Beers owns or operates a large portion of the world’s rough diamond production mines and distribution networks. The DTC or Diamond Trading Company is a subsidiary of De Beers and markets diamonds from De Beers run mines. After being mined the diamonds are then sent to be cut and polished. The polishing and cutting of diamonds is a specific skill that is done in a limited number of locations worldwide. Original diamond cutting centers are Amsterdam, Antwerp, Johannesburg, New York, and Tel Aviv. More recently, due to the lower labor cost, diamond cutting centers have opened in China, India, Namibia, and Botswana. Diamonds which have been prepared as gemstones, such as the ones you would see in most engagement rings, are sold on diamond exchanges called bourses. “There are 28 registered diamond bourses in the world” (Linetskaya,Yelena. “Big Apple Secrets”).

Although there are no firm estimates of how many diamonds are in circulation, to put these numbers into perspective, one out of 25 diamonds to three out of 20 diamonds will trace back to an illegal source. However many of the diamonds that are mined today are claimed to be conflict free. De Beers, the largest producer of diamonds in the world, states on its website that “more than 99% (99.8%) of the world’s diamonds are certified conflict free” (FAQs). This statement from the De Beers Company shows that there is progress being made however there is still a gap in the industry for which conflict diamonds may sneak through. Although miniscule amounts of blood diamonds are being traded today, they still pose a threat to the world if any rogue nation decides to begin buying blood diamonds thus filling the coffers of the warlords and perpetuating the violence that already plagues countries like Sierra Leone.

1. Manipulation of commodity cost. As a common practice in the company, management would instruct related accounting employee to decrease the commodity costs by a small incremental at a time, until the desired earning numbers for that period was achieved.

Select a company listed on the Australian Stock Exchange, find and download the following data

That being said, we would agree with the Treasury Staff to realize inflation, but with a different method.