The multi-billion dollar business of diamonds revolves around the attractive pebble that has a less intrinsic value per carat. The higher value is an artificial one and is attributable to the strong hand of De Beers. The sights in London are not merely occasions for major gem manufacturers to select the uncut diamonds that they wish to purchase but an integral part of the mechanism through which De Beers establishes and maintains the value of diamonds. Through its clients - whose fortunes depend heavily on the contents of the shoeboxes they receive - it is able to monitor and regulate the flow of diamonds that pass through the world pipeline into the retail market.
The central questions are - Are diamonds rare? Or are their prices hideously inflated? De Beers officials are unresponsive on these points. They will speak of how the company has "democratized" diamonds by offering them to millions of ordinary consumers. Author Matthew Hart said that today diamonds plainly are not rare, especially consumer quality gems commonly used for engagement rings. "There is a large supply of diamonds," Hart said. "In fact there is more than 100 million carats a year of diamonds that come out of the ground. That might be as many as 800 million separate stones."
In July 2004, De-Beers SA (South Africa), pleaded guilty to price fixing and agreed to pay $10 million to settle a 10-year-old indictment. The Justice Department had charged De-Beers in 1994 with conspiring to fix the prices for industrial diamonds, rough stones used in a variety of cutting and polishing, in this country and elsewhere. General Electric Co., indicted as a co-conspirator in the case.