De beers is a mining company with mines in Africa and North America (Canada) and is engaged in all mining categories of diamond mining (open-pit, underground, large scale alluvial, coastal and deep sea). The company employs approximately 20,000 people globally.
The company was formed as the result of a merger of the companies ‘Barney Barnato’ and ‘Cecil Rhodes’. By the end of the year, the new company, De Beers, owned all of the mines in the country (Africa) and so were a total monopoly. (Now reduced to 80%)
Alongside mining, the company also works in diamond trading, exploration and manufacture.
As the monopoly power, De Beers acts as the price setter in the diamond market. As a luxury good, the price of diamonds can be relatively high and the demand would not change much (inelastic).
They have various means of forcing people out of the market and ensuring they have control. One is by purchasing diamonds from other suppliers and stockpiling them. This enables them to change the number supplied when demand changes, keeping prices constant.
De Beers was fined $10 million in recent years for a collusion with General Electricity (GE) to fix diamond prices – this is not in the interest of consumers and is also ILLEGAL!
The company was formed as the result of a merger of the companies ‘Barney Barnato’ and ‘Cecil Rhodes’. By the end of the year, the new company, De Beers, owned all of the mines in the country (Africa) and so were a total monopoly. (Now reduced to 80%)
Alongside mining, the company also works in diamond trading, exploration and manufacture.
As the monopoly power, De Beers acts as the price setter in the diamond market. As a luxury good, the price of diamonds can be relatively high and the demand would not change much (inelastic).
They have various means of forcing people out of the market and ensuring they have control. One is by purchasing diamonds from other suppliers and stockpiling them. This enables them to change the number supplied when demand changes, keeping prices constant.
De Beers was fined $10 million in recent years for a collusion with General Electricity (GE) to fix diamond prices – this is not in the interest of consumers and is also ILLEGAL!
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