De Beers

Case study in ECA

“De Beers Consolidated Mines Ltd.”

1. Is the CSO more successful than OPEC in the oil industry? Why?

比起石油輸出國組織，鑽石產業的運作比較成功嗎？

Y, CSO was more successful than OPEC in the oil industry.

CSO in diamond industry and OPEC in oil industry are both cartel and monopolists to certain degree. Because the price (real and nominal) of diamond in the year 1968-1982 (Exhibit 1) had been steadily increased as compared to the crude oil (Figure 1), the CSO is more successful than the OPEC.

2. What functions does the CSO perform as a global intermediary? How do these

functions help expand the economic pie in the diamond industry?

做為全球性的中介機構，CSO 扮演什麼樣的功能？這些功能如何幫助擴大鑽石

產業的利潤？

|CSO 扮演的功能: |如何幫助擴大鑽石產業的利潤？ |

|Supply: | |

|CSO bought the rough from mines owned or controlled by De Beers, from |Create a monopoly power |

|cartel members, and also from independent producers. In 1982, CSO |Much of world production flows through the CSO to be sorted, valued, |

|bought 67% of the total rough stone (Exbit 4). |and ultimately resold. Being a clearinghouse for the entire industry. |

|The CSO's sales downstream are carefully monitored to keep prices from |CSO regulates the quantity and price in the market. |

|falling. CSO built a highly controlled selling routine called “sight” |Diamond price can be maintained or evn manipulated and determined. |

|The CSO hold a fluctuating stockpile of diamonds, which rises when | |

|growth in production exceeds growth in final diamond demand. | |...