[Analysis] The ‘Post-Cartel’ Diamond World Faces Its First Crisis

In a 1998 interview, Nicky Oppenheimer told JCK: In good times, people often say, 'We don't need De Beers,' and it's true; in good times, you don't. It's in bad times that people recognize the benefit of the CSO [Central Selling Organisation]. The past year fits anyone's definition of “bad times.” It saw the steepest drop in diamond demand in more than 50 years. It saw banks refusing to lend, business come to a standstill, and a jaw-dropping string of retailer and manufacturer bankruptcies. And the CSO is just a memory. De Beers, of course, is still around. But it's a remade company that is forbidden from cartel-like activities—such as stockpiling diamond production—by the European Union. And the fact is, even if it tried to manage the diamond market, it likely wouldn't be able to. Today, De Beers controls 40 percent of the market, a far cry from the 80 percent to 90 pe

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