Swapping gems for cash
What next for South Africa’s foremost mining family?The Economist
Johannesburg
Most people would be overjoyed to pocket $5.1 billion. But Nicky Oppenheimer, the chairman of De Beers, said that it was with a heavy heart that his family had decided to sell its remaining 40% stake in the world’s biggest diamond miner to Anglo American, a mining behemoth. The deal marks the end of an era for South Africa’s foremost mining dynasty.
The Oppenheimers have been in the diamond business for more than a century, including over 80 years with De Beers. Nicky’s grandfather Ernest settled in South Africa in 1902, having been posted to the diamond-boom town of Kimberley at the age of 22 as an agent for a London-based firm of gem traders. By 1917 he had set up his own mining company, Anglo American. A few years later he won control of De Beers, a diamond miner that had been founded in 1880 by Cecil Rhodes, a British-born colonialist. By the time Rhodes died in 1902, De Beers controlled 90% of the world’s diamond production. Rhodes’s immense fortune still pays for people like Bill Clinton to study at Oxford.
Since 1929, when Sir Ernest (knighted for war services in 1921) took over as chairman, the Oppenheimers have led De Beers almost without interruption, massaging the price of diamonds by hoarding them and occasionally selling part of the firm’s stockpile. The family has wielded political influence, too, mostly bankrolling liberal causes. Both Ernest and his son Harry served in South Africa’s parliament: Ernest for 14 years in the run-up to the second world war, and Harry for nine years as a member of the anti-apartheid opposition.