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De Beers and US Anti Trust Law - Case Study Example

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Author : nathan33

Summary

Diamond market is dominated by De Beers world over for more than one hundred years since its inception in 1880. The diamond trade has been managed by a 'cartel' since these days headed by De Beers mining company. Once the availability of diamond mines shrunk to Africa and a few in Brazil, the diamond mines in Africa controlled the availability of the diamonds in the market and their price…

Extract of sample
De Beers and US Anti Trust Law


With the discovery of large mines in South Africa, the diamond availability in the world market suddenly reached a high. In order to ensure that the prices of the diamond in the market are maintained, the supplies had to be limited. The miners in South Africa which was the lead producer of diamonds, started working together and created a 'cartel' that would discuss and decide the price of diamonds in the world market. This cartel was formed with De Beers in the lead and they coordinated the entire operation of forming this initial syndicate that would canalize and fix the supplies of diamonds in the world market. This also ensured that every body in the trade benefited because it maintained the price of the diamond in the world market without allowing it to fall or rise phenomenally.
Once the diamond mines in other locations of the world were discovered, the South African control over the world market with respect to the supplies of the diamond mines came down. More mines in Angola, Russia, Congo and Zaire started to dominate the world market and the South African share in the market came down to 17%. ...
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