Monopoly paper / DeBeers monopol (0)

Running head: DE BEERS MONOPOLY
De Beers Monopoly
Microeconomics
Diamonds – an extremely hard, highly refractive crystalline form of carbon that is usually colourless and well know as “girl’s best friends ”, but the story of how diamonds got so famous and how they have remained so rare is down to a company named DeBeers. This paper is about DeBeers, the most powerful diamond company in the world. Monopoly main characteristics were that firm is single seller of the product without any close substitutes . Nowadays DeBeers have many substitutes and that is the reason why they are not a pure monopoly, but they are definitely nearly one. This is because the firm still has the bulk of world sales and controls 45% of world diamonds market . This paper examines these monopoly characterises, also how and why DeBeers diamonds monopoly still exists and what benefits they give the world. Also how the firm handled the problems which resulted from new government regulations to make the diamond industry more competitive.
De Beers Diamonds is a Swizz- based company which was founded in 1888 by Cecil Rhodes, a British Business man. The company was financially supported by an Alfred Beit, who was a British South African magnate and Rotchilds multinational investment banking company. The company got its name from brothers : Diederik Arnolds and Johannes Nicholas de Beers, who were not, involved in the company, but whose farm becomes the site of the most lucrative mine. Shortly after founding the company, De Beers already controlled almost all the world’s diamond production , either they bought out new producers or entered into agreements with local governments. They had diamonds mines in Australia , India, Russia and some of the African countries. In 1927 the chairmanship of the company was taken over by the Jewish businessman Ernest Oppenheimer, whose successors have been operating as chairmen of the group till 2011, when they sold their 40% stake to Anglo America. De Beers view during the Oppenheimer times was all or nothing like example:
The discovery of diamonds in Siberia in the 1950s