Wednesday, November 17, 2010
The Diamond Cartel
The discoveries of 1870-71 in South Africa led to a great number of prospectors staking out claims and securing the diamonds by open-pit or quarry mining. The damage caused by floods and mudslides, unavoidable when there were so many different claims, was an important factor in the series of amalgamations carried on by Cecil Rhodes and Barnett Barnato. Rhodes brought about the merging of their interests in the De Beers Consolidated Mines, Ltd., which established (1889) an effective monopoly over the diamond industry. Loss of diamonds by theft was reduced through the passage of the so-called I.D.B. (Illicit Diamond Buying) Act, which limited the trade to licensed buyers and imposed penalties for the possession of uncut stones without a license. Thefts were further curtailed by the institution of compounds in which the workers live while employed by the company and which they leave only after being thoroughly searched.