King of Diamonds

In the cathedral-like atmosphere of the world's diamond headquarters, where aged Havana leaf burns like incense and merchants converse in hushed tones, a change is slowly taking place. The De Beers diamond cartel, which has its Central Selling Organization in London and its production fields in Africa, has opened a discreet but energetic campaign to promote the glitter of diamonds to new markets. In the U.S., which traditionally buys one-half of the world's gem diamonds, jewelry has lost some of its shine--people who can afford diamonds often prefer other luxuries, such as trips abroad. De Beers is concentrating on the newly affluent Europeans, subjecting them to a multimillion-dollar ad campaign. As usual, the company's name appears only in tiny, sedate type in the ads. It doesn't need to appear at all, for 80% of the world's diamonds are sold through De Beers.

Cut to Size. As the world's biggest private monopoly, De Beers has trebled its sales of diamonds since 1946, but last year's $270 million in sales was a bare 1% increase over 1961. And as sales hardly changed, deeper and better mining methods boosted De Beers' own output in South Africa, South West Africa and Tanganyika by nearly 10% (to an estimated 5,270,000 carats), leaving De Beers with a temporary surplus, mostly in smaller stones. Chairman Harry Oppenheimer, 54, intends to cut this surplus to size by convincing European men, who seldom give diamond rings to their fiancees, that diamonds are not a gift exclusively for the very rich.*

Oppenheimer firmly denies that De Beers any longer holds diamonds off the market to buttress prices, which his father, Sir Ernest Oppenheimer, did during the Depression. But Harry Oppenheimer, a thoughtful and gregarious veteran of Oxford and Britain's World War II Desert Rats, does indeed set prices for the industry. Reason: almost all other African producers see the advantage of selling to the De Beers powerhouse rather than engaging in cutthroat competition. Even the Soviets recently chose Oppenheimer to market their Siberian gems. As for those who dig his diamonds out, Oppenheimer pays his unskilled African laborers better than most, but it still does not seem like much: an average 78-c- a day, plus free housing, food and medical care.

Appeals Endured. Harry Oppenheimer is the wealthiest and mightiest businessman in Africa. Besides his global hold over diamonds, Oppenheimer, through the Anglo American Corp. (of which he is also chairman), controls or holds substantial interests in a $2.4 billion empire of 150 gold, copper, uranium, coal, chemical, explosives and banking companies. A member of South Africa's Parliament for ten years, he left politics to run the business after his father's death in 1957. Because he controls South Africa's chief source of foreign exchange, and is a man with an international reputation, the nationalist government endures his outspoken appeal for South Africa to rejoin the Commonwealth and to treat its black Africans better.

* In the U.S., where 80% of all engagements are sealed by diamonds, the average engagement ring has a center stone weighing 45 points, retails for $230.

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