Inside De Beers: Behind the Doors of the World’s Leading Diamond Company | ENDEVR Documentary

Blumberg inside series where we go into some of the world's best-known companies I'm Olivia Sterns and today we're going where cameras never have gone before join me as we go inside Devere it is a name synonymous with the Diamonds they produce De Beers the world's largest diamond miner founded in South Africa back in 1888 by sessile Rhodes the British pioneer who also founded Rhodesia now modern-day Zimbabwe then for eight decades it was controlled by the Oppenheimer dynasty who in effect ran a cartel controlling the world's diamond market but in 2011 that control came to an end with Anglo American buying the family's controlling stake for more than five billion dollars headquartered in Johannesburg De Beers operates mines in South Africa Namibia Botswana and Canada owning more than 13,000 square kilometers of land that's equivalent to the size of 389 Central Park's or about eight times the size of London in an area so large it isn't easy looking for a stone so small last year De Beers workers traveled more than two million kilometres by Road in search of the precious stones or about 1.3 million miles that's long enough to go from the earth to the moon and back almost three times but the trek seems worth it the diamond giant mines around 30 million carats worth of diamonds each year and had sales of about seven and a half billion dollars in 2011 they extract diamonds from both above and below ground on desert beaches at the bottom of the ocean and even beneath an Arctic lake but most of its diamonds come from southern Africa in fact 43% of all diamonds produced by value come from this part of the world but working with diamonds also means De Beers has to contend with theft in 2010 more than 2 million dollars worth of diamonds were stolen from a single factory in Namibia alone not enough though to make a dent in the profits of a company which hasn't posted a loss in decades they're the hardest substance on earth diamonds so what does it take to go from shovel to shop let's start at the source while a large quantity probably came from here De Beers 1 in mine you're looking at the world's richest diamond mine right here in the Kalahari Desert of central Botswana this really is the crown jewel in the De Beers Empire it's a dusty and slow journey into this pit so big that it falls into the super pit category and in a few years it will be deep enough to fit two Eiffel Towers end-to-end trucks descend empty line up and wait their turn at one of the biggest machines in all of Africa standing at some 65 feet it took 40 trucks and six rail cars just to get it into the mine how many scoops fill up one truck three scoops three scoops yeah how much does a shovel like this cost and what's that in dollars that's about 320 do you think I can give it a try but thirty million dollars for a machine isn't even DeBeers biggest capital expenditure that honor might actually go to its tires whoaa so Titus this machine is pretty huge how much is one of these tires ditional this is about forty thousand US dollars six per truck and how many times there's sixteen of this size the dilemma time commercial trucks this it's about four for this size of tires it's about three point four million and for the other tires on the other side of the kids it's about 6.8 million and once loaded on those ten million dollar tires each load starts making the long journey out of the pit now once the diamonds finally make their way out of the mine there are a few more stops though before they end up as polished perfection in stores like the one behind me it's a jewel thieves dream so much so that you simply push millions worth out of the way without hesitation and sweep in the next bunch small diamonds big diamonds clear diamonds and dark ones welcome to the DTC the diamond trading company this is the rough diamond distribution center for De Beers this is the middle step in between the mines and the cutters what we're doing here is sorting the stones there are almost twelve thousand categories the most important things though are the four C's cut color clarity and of course carrot think of DTC as a bridge all the stones that DeBeers mines not just in Botswana come through here they're mixed and sorted before being sold most sales are de pre-selected customers called site holders it's an elite club of less than 100 jewelers and entry is by invite only upset De Beers one year and you might not be back next we've is--it it one site holder to find out what happens to the rough diamonds basically we'll check the passer this stone is an eight point one nine three carats we scan the stone in this machine okay I know what he'll do he will try and maximize the profit out of each and every stone we'll see there the outskirt is the rough diamond and we'll try and plot in this case two round diamonds the most efficient way exactly maximized most exactly once we decided this is the best way we want to produce that stone the machine will mark a laser line in the middle this yellow line but you don't really trust the computer program to come up with the most profitable equation yes well obviously we have our guys which will determine what is the best way it's not only what the Machine will decide they will know the the market price next the stones are cut by lasers rounded off then sent for polishing you like to polish in put it gently here can hold it put it gently against and slowly slowly drop it until it touches slowly slowly you can leave it there and you finish you check what you did with the look now diamonds are sure to be on many people's holiday wishlist this season but just why are we all so obsessed with diamonds we're gonna tell you how diamonds became part of pop culture after the break [Music] welcome back to inside the beers now a diamond is forever is one of the best-known advertising slogans of all time it's in movies it's in music it's everywhere but it all started with an idea from De Beers and an advertising firm half a century ago if you want to profess your love there's no better gift than a diamond but it wasn't always the case a diamond is forever De Beers back in the 1940s De Beers an ad agency NW iron did something remarkable they invented a slogan that became part of pop culture you know the marketing strategy really twofold focus on on building the engagement ring tradition and associating diamonds with with love in that tradition and then the second tier was always about making sure that they were glamorous and aspirational and beautiful it's probably not an accident that Marilyn Monroe was singing about Donna's and a girl's best friend diamonds are Spurs friend I do think though the James Bond connection is a fascinating one thank you my name is bond James Bond if you watch carefully particularly the Sean Connery films you hear the beer is referenced it's been I think good for Bond and probably pretty good for us in terms of awareness of the the law no diamond is forever [Music] diamonds are forever a slogan so successful Advertising Age calls it the best campaign of the 20th century it was in one sentence really the the full cover what a diamond should mean for somebody wearing it so it was just a little bit of a genius sign at that time I think De Beers is a diamond is forever campaign really was a revolutionary campaign because you got to remember that before that campaign which began but 1940s diamonds weren't really treasured they were seen a bit in America they weren't see in the UK they weren't seen in Japan they weren't even the rarest stone a ruby is the rarest stone and then making sure it became a symbol of romance is one most effective campaigns in the history of marketing more than half a century later the diamond is forever campaign still resonates so at De Beers diamonds aren't the only things that stand the test of time [Music] for nearly a century De Beers has run all of its trading operations from here in London now though the company is moving and starting next year De Beers will be sorting billions of dollars of rough diamonds like these from down in Botswana a diamond in the rough it's a fitting metaphor for Botswana itself the country has gone from one of the poorest in the world to middle-income in just 50 years the economy is booming growing over 8 percent annually on the back of its mineral wealth but it's not simply the country's diamond reserves fueling growth it's also its unique relationship with De Beers De Beers is 85 percent owned by Anglo American and 15 percent owned by the government of Botswana the actual mining operation in Botswana is a 50-50 joint venture with the government called Debs wanna part of a lucrative 40 year deal that's turned the country's economy around terms of the revenue they get a lot more than the 50 percent because they get a they get a mineral royalty which is typical of any country and they get normal income tax so the actual split the revenue is is about 280 to 20 but it's these are the richest mines in the world diamonds remain the single biggest contributor to GDP in Botswana around 30% and now account for almost 80 percent of total export earnings today the JV is working on new ways though to spread the wealth for the past 80 years De Beers has run its sales operations out of these offices here in London but now as part of the latest 10-year deal they've agreed to move these operations away from here to here in Botswana's capital Gaborone in a new extension still under construction the government wants Botswana not to be just a place to mine diamonds but become an actual industry hub it's going to take some time because this is the beginning of a new era for Botswana and for hub Iran but we are working very closely with the Republic of Botswana with all the official day to bring Harbor on the capital of boos vanna up to the standard of a big hub like and verb like Televi is going to take some time but we are working closely together to make it happen currently four out of every five dollars earned by Debb SWANA goes into public funds the results are visible on the streets the money is funding roads schools and hospitals including one of Africa's most comprehensive treatment programs for HIV De Beers joint venture with Botswana became the first company in the world to offer all of its employees free antiretroviral drugs and their dependents since then the program has expanded with government health and now offers everyone in the country who needs it these life-saving drugs with the coming of the program a lot of people have been able to go on treatment and we are saving lives basically and I do not believed as a person in this country who has not lost their relative due to hiv/aids especially since before the program but now the mortality rate has come down hugely we hardly hear of HIV associated death anymore every Madonna knows that this is because of the diamonds that are coming from the mines coming up after the break we speak to the CEO and find out what the move to Botswana means for De Beers [Music] welcome back to inside the beers now London has been the heart of the beers for decades but the soul of the company is still in southern Africa I spoke to the CEO Philip meliae about the company's move from London down to Gaborone in Botswana mr. Malley thank you very much for taking the time to speak with us we've just come back from this fabulous trip to Botswana so I thought we could start by talking a little bit about butts wanna tell me if you will where do you see Botswana fitting in to the De Beers Empire would you perhaps say it's the crown jewel yeah it's the crown jewel because most of our diamonds are coming from Botswana our two biggest mines joining I know Appa are in Botswana the government of Botswana the Republic of Botswana is our second shareholder with 15% and we are in John venture in Botswana with them 5050 in a company called depth one which is operating the mines there and we are also together in the sorting Center in Botswana so we are very very much interlinked and this has been a public partnership going on for ages now it's a very very successful partnership so I spend a lot of time in Botswana I will be there next week and this is clearly one of the big center of the BS today you're in the midst of moving more of your sales and trading operations down to Gaborone down to Botswana why does that make sense it makes sense because most of our diamonds are coming from there we signed last year very very important sales agreement with the government of Republic of Botswana for 10 years we will have the bulk 90 or 85 percent of the diamonds being produced in Botswana sold to us so I think it was a fair negotiation very long term partnership 10 years agreement which is a unique thing in our business and as a result we are going to transfer separation there so I think that's win-win for both both sides and it's also quite interesting our diamonds will stay in Botswana we will bring the other run of mine as we call them down to Botswana from Canada from South Africa from Namibia to be aggregated to be sorted so going to be a shorter lead time and turnaround time for our diamonds to be solved do you think that Gaborone could perhaps one day rival Antwerp or Tel Aviv it's going to take some time because this is the beginning of a new era for both vana and for hub Iran but we are working very closely with public open Savannah with all the official day to bring Harbor on the capital of boos vana up to the standard of a big hub like and verb like Tel Aviv is going to take some time but we are working closely together to make it happen how is the progress actually coming along for the move we are in terms of moving our operation down to Boz vana we are two months ahead of schedule so we are reviewing the situation every month with the official down there and it's working quite well we're also working on all the infrastructure which are going to be required to receive our customers in harbour on and the deadline is the end of next year we are well down the path and things are working okay so far so good one of the key parts of the De Beers Empire has been this signature campaign a diamond is forever you know Ad Age called it the most successful advertising campaign of the 20th century why do you think that campaign was so powerful I think it was big it was the first time we were linking the diamond with its values forever why because a diamond is going to last forever doesn't age doesn't change it has been created two billion years ago and I hope will carry on for another 2 billion years and it's also very much linked with eternity with love with passion so it was in one sentence really the the full cover of what a diamond should mean for somebody wearing it so it was just a little bit of a genius sign at that time I think this was created in 1947 and is still very very much up to date today a diamond is forever covers everything we want to say now that the industry has changed so much and the beers doesn't have such huge control over the market there seems to have been a shift from marketing diamonds as an entire category of commodity towards marketing De Beers more just as a brand I would just unfortunately cut you diamond is not a commodity it's a luxury product it's not something like copper for example so we are marketing diamond as unique pieces not to diamonds are equal and we categorize diamond in 12,000 categories just to show you the complexity of what we produce so it's we where the diamond industry the company was founded 120 years ago we were the diamond industry and in the last 10 years a lot of things have changed now we are still by value the biggest producer of diamond in the world but we are one among others so we are open to competition we have other producers we have a fair competition between all of us therefore we have to talk about the Beers diamonds which are the most beautiful in the world and we have to compete other diamonds coming from other mines around the world so it's very important that we keep the diamond equity the values of diamond diamonds are forever but we are focusing a lot on our diamonds and we do that through two channels our marketing campaign through the forever mark diamonds we are selling and we are promoting front of a mock diamonds one of the brand of the De Beers group all around the world we have launched it around the world the latest launch is now in the US and we are also promoting the Beers diamonds through the BS diamond jewelry the shop we are here today so De Beers helped make diamonds in a sort of a cultural imperative you know diamond engagement rings became an integral part of getting married in many cultures do you think though now that you're not generic marketing diamonds as a category not as a commodity do you think that there's sort of a risk that you're going to lose that sort of cultural connection of diamonds no I don't think so clearly the shift to diamonds for engagement ring or wedding ring has been happening in the US has been happening in Europe but is a recent phenomena in China and we still have to see it to a great extent in India so we are working with our site owners our customers to promote diamond as a piece of jewelry which is absolutely essential when you get engaged or when you get married so we still have new potential customers to convince and the campaign is now being run all around the world in new countries like China India to promote diamond a few years ago China and India where gold only markets diamonds were a very very small part of the growing market and in China it's more and more opening in India we are seeing some very small sign that yes we have a lot of potential so the market still has to open and we have some good prospect there okay I definitely want to talk to you all about your market outlook in those regions but you mentioned the history let's go back to that for a second last year the Oppenheimer family sold out to Anglo what does the new ownership mean for the beers the family decided to sell and they had 40% of the shares and now as a result of it Anglo American as 85% of the shares the government Republic of Botswana has 15% but for a long time Anglo American was our biggest shareholder we were once not so long ago part of the Anglo American group so it was a natural home for the shares of the Oppenheimer's so we are back in Anglo both companies were founded by the Oppenheimer family we are not leaving the family in a way is there perhaps a push though for more transparency or any changes to business practices now that you have to go back to sort of compiling with footsie listing requirements yeah we have to be open and we have to comply with the requirement for listed company because Anglo American is a very big listed company but even if we were a private company before we were still at that time communicating our result so the the transparency and the openness we are going to have today is not very different from what we were having in the past it's not a big change for us the industry and the business model have both changed so much in the past couple decades DeBeers of course has widely been accused of operating as a cartel first of all is that a fair accusation it's a long time ago and certainly a long time before my time you know we were the diamond industry and we are coming from the past with maybe ways of doing business from the past today we are I think totally integrated in in the new luxury world of today we have competitors we are a leading company we are not dominating and we're just fighting to make sure that the best diamond in the world are the vs diamond this is what I am focusing on today the past is the past well some say some analysts say that we've now moved from a cartel to sort of an oligopoly that there are a few still just a few small a few players in the market do you think that's not true no we are by value the biggest in the world but in terms of carats our competitor al-hasa in Russia is producing more carrots than us and we have big companies like Petra gems emerging around the world we have Rio Tinto still quite big in diamonds now we are not alone and we have I can tell you in terms of pricing of our product quite a tough competition day-to-day in the marketplace we have changed so now you've seen what cameras never have before the inner workings of the world's best-known diamond company De Beers I'm Olivia Sterns thanks for watching

Channel: ENDEVR

Views: 79,204

Rating: 4.7002459 out of 5

Keywords: Free documentary, documentaries, full documentary, hd documentary, documentary - topic, documentary (tv genre), Business Documentary, debeers, debeers history, debeers story, de beers documentary, de beers, de beers diamond, de beers diamonds, de beers story, de beers history, bloomberg, diamonds, diamond business, diamond documentary

Id: iqf9EAGp-Mk

Length: 25min 15sec (1515 seconds)

Published: Sun Sep 06 2020