Debeers: Australia's Argyle Diamond Industry

There were several things threats that put DeBeer’s interests in jeopardy. The first one were unforeseen circumstances in the event of new diamond-producing competitors which affected DeBeers’ control of the industry. With the fall of the Soviet Union in 1991, Lev Leviev, a well-established diamond manufacturer in Israel, found his opportunity in Russia to partner with Alrosa in a joint venture. In 1996, a second blow to DeBeers’ position occurrered when Australia’s Argyle diamond mine ended its dealings with DeBeers and ventured on its own. In addition, with Canada becoming a mine producer in the 1990s, it became a new threat to DeBeers, especially because in 1999, Tiffany & Co. bought a stake in Canadian mining for $104M and would not continue business with DeBeers. In conjunction with DeBeers seeing the business landscape change, new industry laws were implemented that allowed many in Southern African countries to keep much of the operation in those countries. In order to accomplish this, some countries amended their diamond laws in support of their local industries, for instance, Nambia’s 1999 inserting of a clause in a law allowing the government to coerce miners to sell a percentage of their product to local polishers. Another example is in 2005 when South Africa passed the …show more content…
Chemically the same as the natural diamonds, nearly $50M synthetic diamonds were sold annually and analysts projected sales to grow and exceed $2B. In 2006, 400,000 synethic diamonds were made in the US and prices increased by 20%, with all of the product being sold. The synthetic diamond collections were sold by jewelers throughout the US. In 1996, Robert Linares, founder of Apollo Diamond Inc., obtained a patent for the CVD process that created these diamonds, allowing them to be flawless and to come in different