The Long and Winding Rhodes – #4 (Running Governments and a Diamond Cartel)

By Let's Get Honest|She Looks It Up

Phew, what a history!   There seems to be no part of history this has not affected to date, all things considered.  Putting some of this history together is about as good a lesson in world history, politics, finances, corporations, and how things work as is possible in such a short topic.

The problem with Diamonds is not that they’re rare — but that they aren’t.  Hence, the cartel. Cecil Rhodes understood this from the very start, and was ruthlessly and restlessly ahead of the game in getting what he wanted, in order to further (naturally) the expansion of the British empire What flows from this, besides blood, arms, is history. Up til now.  This first article is just to document how the U.S. Clinton Administration helped persuade the UN to play into to the concept that De Beers had some humanitarian concerns related to African countries.  Rhodes Scholar ex-President Bill Clinton did well in helping the overall plan...

The New Diamond Con WALL STREET JOURNAL August 3, 2000

by Edward Jay Epstein

De Beers announced with great fanfare in July that it was abandoning its policy of buying diamonds in African conflict zones, occasioning both applause and predictions of De Beers’ demise. But the diamond cartel, while modifying its tactics, has not changed its basic strategy. Almost since its inception at the end of the 19th century, the diamond cartel has had a singular strategy: stifling, by any means necessary, the flow of gem diamonds from sources not under its ownership or control.

The problem with diamonds isn’t their scarcity, but their abundance. They are found not only in geological formations like volcanic pipes that can be fenced off and mined, but also in vast alluvial areas like river beds or beaches, places that can’t be restricted. When Europe ruled Africa, the cartel had little problem making arrangements with colonial administrators to police or close down freelance diamond gathering.

After African colonies got their independence, the cartel came to terms with dictators like Mobutu Sese Seko, whose police kept out — and occasionally massacred — suspected smugglers. Where governments were less cooperative or capable, the cartel commissioned mercenaries to suppress, often by maiming or killing, prospective diamond hunters.

Where governments were less cooperative or capable, the cartel commissioned mercenaries to suppress, often by maiming or killing, prospective diamond hunters. At one point in the 1960s, the cartel gave bounties to remnants of the Katanga gendarmerie to hunt down “smugglers” in Angola…The cartel now has found an ingenious new mechanism for achieving its ends: the United Nations. After spending months laying the conceptual groundwork in the media, as well as working through the Clinton administration and human-rights communities, it has convinced the U.N. Security Council to impose a global ban on “undocumented” gem diamonds from “conflict zones.”

Undocumented diamonds are, of course, just those diamonds picked out of river beds that De Beers wants eliminated. The “conflict zones,” Angola and Sierra Leone, are the alluvial areas in which De Beers previously depended on paid guns.  

Instead of using colonial administrations, dictators or mercenary gangs to stop Africans from gathering and selling stones, the U.N. will use its resources (backed, no doubt, by the cartel’s own contingent of lawyers and detectives) to accomplish that task. The cartel managed this favorable outcome by playing on the guilt of the West. The idea that “blood diamonds” were responsible for ferocious civil wars in Africa was too much for altruists and activists in developed nations. Mr. Clinton, meanwhile, saw diamonds as an opportunity to enhance his own standing among these groups. On July 21, he called for “an international conference to consider practical approaches to breaking the link between the illicit trade in diamonds and armed conflict . . .” Mr. Clinton’s press release made no secret of the liaison with the diamond cartel, noting that at a May conference in South Africa, the U.S., Britain and Belgium, among others, had agreed with De Beers upon the importance of establishing a global certification scheme for diamonds.

I found a fascinating, 19-chapter, on-line “book” (well-researched) by Edward Jay Epstein.  I did, however, read, and the history does indeed bring the Rhodes / De Beers / Oppenheimer story up to this timeframe.   I would call it a must-read.  Just read!  

Also, The Diamond Overhang (NYT article 2009) emphasizes the fact that the public had to be taught psychologically to not part with its gems — or the price would plummet.

The Investigation
The Invention
The Wars
Diamonds Are Not Forever

 

If you read this (scan chapters, get the picture) you will understand more of international politics, probably, than most, and know in general what we are dealing with. Regarding the influence of the Oppenheimers, financing by Rothschilds, etc. — as this chapter points out, medieval guilds restricted Jews to money-lending and diamond-cutting. Moreover they also had the constant threat of the Inquisition, it’s natural they organized, and paid close attention to trade, supply lines, labor, prices, and invested to protect their interests.

The End Notes tell the sources and cause for the story

Please Start Here:  The Character of Rhodes, how his mind was working, shows clearly from the start.  I can’t say anything other than, if you read at least this chapter, you will clearly understand what’s going on with the diamond cartel, and Rhodes’ strategic manipulation to win complete control of the market — which was pursued by his successors in the DeBeers company, to this day.  There are details in this page (and on-line book) which summarize the scope and players.

In July of 1980, a black crowd armed with whips and mallets toppled the bronze statue of Cecil John Rhodes from its pedestal in Salisbury, Zimbabwe. The caption of the Associated Press photograph of the event read, “Symbol of Colonialism Toppled in Zimbabwe.” Rhodes, after all, was the only man in history to have two nations and a federation named after him-Rhodesia (now Zimbabwe), Northern Rhodesia (now Zambia) and the Rhodesian Federation (which had included Malawi, Zambia and Zimbabwe).

In less than ten years, under the royal charter granted to him by the British government, he had colonized millions of square miles of the richest part of southern and eastern Africa. This territorial empire proved ephemeral- not even his bronze statue lasted out the century. He created another empire, however, De Beers, which endured.

Rhodes arrived in the port of Durban in South Africa in September of 1870. He was then a gangly boy of seventeen with a long face that made him appear taller than he was. He spoke with a squeaky voice that disconcerted other passengers on the boat. He had left England and traveled to South Africa because of his failing health. He had a collapsed lung and a weak heart, and his doctor predicted he would not live to the age of twenty-one. His father, a poor vicar in Hertfordshire, sent him on this voyage so that if he did not miraculously recover. he would at least die peacefully in a warm climate. His total stake in the world, a gift from his aunt, was two thousand pounds.

Even with meager resources, Rhodes was possessed by a dream. He wanted to extend the British Empire throughout the world. In a will he drew up several years later, he directed that whatever money he had acquired in his life be used to form a secret society that would attempt, among other things, to bring the United States back under British rule. He also envisioned building a railroad from Capetown, at the southern tip of Africa, to Cairo, at the other end of the continent. The dream railroad, like all his other schemes, was only a means to an end, as he had no real interest in wealth. The end was colonizing Africa, from Capetown to Cairo, for the British empire.

“Prologue: The Diamond Invention”  Can you believe that Cecil Rhodes (who never married, and being in ill health didn’t expect even to live that long) originally calculated how many American marriages, in determining how many diamonds to release?

Despite the source of the statement (“espresso stalinist” apparently on the 100th anniversary of his death, which would put the article to  March,  2002), I’m going to have to agree.  This many was seriously missing something inside.

Besides the size of his stupendous ego and aspirations (he’d annex the planets, if possible), the question of his sexuality, whether misogyny, “homosocial” or possibly simply asexual, came up after his death.

  • Two:  Information from the company “Namdeb”

I looked up “Namibia” and came across the mining history (no mention of the genocide, naturally), a century of history in this timeline.  Notice some of the central players.  Progress only temporarily interrupted by World War I, World War II, as you can see.

http://www.namdeb.com/about_namdeb_history.php {{“NAM” Namibia; “DEB” DeBeers, }}

Namdeb is a wholly owned subsidiary of Namdeb Holdings (Proprietary) Limited Holdings which is owned in equal shares (50:50) by the Government of the Republic of Namibia and De Beers. Namdeb performs land-based prospecting (exploration), mining and rehabilitation operation and services for Namdeb Holdings.

The heart of the operations is along the southwest coast of Namibia with the main land-based operations in Oranjemund and satellite mines near Lüderitz and along the Orange River. Several types of innovative mining techniques are employed to extract diamonds from alluvial deposits of ore bodies. Mining techniques using specialised equipment such as, vacuum extractors, dredgers, floating treatment plants and probe drilling platforms are used to extract the resource.

Namdeb’s rich history goes as far back as 1920 when diamond-mining companies along the Orange River were amalgamated to form Consolidated Diamond Mines (CDM). In 1994 CDM entered into a new partnership with the Namibian Government and Namdeb was formed.

In 2011, the ownership structure for Namdeb changed when the Government of the Republic of Namibia and De Beers signed a new structure agreement which rearranged and equalised the shareholding structure of Namdeb and De Beers Marine Namibia.

Namdeb’s Proud History at a Glance

1908 A railway worker, Zacharia Lewala, stumbles on a shiny treasure near Lüderitz. The sparkling discovery leads to a major diamond rush.
1908 Diamond mining regulations are introduced and the Sperrgebiet or (forbidden territory) is declared.
1920 Sir Ernest Oppenheimer forms Consolidated Diamond Mines of South West Africa (CDM).
1923 CDM concludes the Halbscheid Agreement with the South West African Administration, granting CDM the mining rights for the Sperrgebiet.
1930 Diamond mining operations cease at Kolmanskop
1936 Oranjemund town is established, which adopted its name from its geographical position at the mouth of the Orange River, the national boundary between the Republic of Namibia and South Africa.
1943 CDM Head Office moves from Kolmanskop to Oranjemund.
1951 Oppenheimer Bridge linking Namibia with South Africa is opened. another higher, wider bridge is built two years later to withstand floods better.
1961 First offshore mining concession granted.
1977 CDM Head Office moves from Kimberley to Windhoek.
1994 An agreement between CDM and the Government of the Republic of Namibia results in the formation of Namdeb Diamond Corporation (Pty) Limited. All De Beers Group existing Namibian mining licences and related rights are replaced by a consolidated and rationalized mineral agreement.
2004 Namdeb turns 10
2010 Project 2050 is initiated
2011 The Government of the Republic of Namibia and De Beers signed the new structure agreement which rearranges and equalises the shareholding structure of Namdeb and De Beers Marine Namibia.

Notice no mention is made of who built the railway (see “death camps”) originally:

Further “NAMDEB” information from the history page, including marine mining and involvement of a Texas Oilman.

Diamonds have been mined in Namibia since 1908, when railway worker Zacharias Lewala found a stone that would change the course of history of South West Africa/Namibia, and of alluvial mining. The stone was a diamond, and shortly after he handed it to his supervisor, August Stauch, a frenzied diamond rush to the desert sands near Luderitz took place and resulted in the mining of seven million carats for colonial Germany until World War I in 1914.The deposits were very rich, so rich that Stauch and others could often simply pick up diamonds from the valley floors. In other places, valley floors were systematically swept clean of their sediments, the oversize screened off and right-sized material carried, carted or railed to treatment plants.Innovative equipment was invented to treat the material – Plietz jigs, Schiechel pots, electric shovels, and the longest narrow gauge railway network in the world were introduced, all within the space of six years, to mine in this vast, challenging environment.Work resumed after WWI with the various colonial mining companies having been combined into the Consolidated Diamond Mines of South West Africa, later to be renamed CDM, and the prospector Reüning, discovering the classic diamondiferous raised beaches near Oranjemund, which have now been mined continuously for nearly 80 years and have yielded 65 million carats of high quality large gems over the years.

In the early 1990s CDM was transformed into the modern Namibian diamond mining company Namdeb, and through progressive legislation its seven mineral licences covering 16 000 square kilometres have replaced the old grant area of the Sperrgebiet, the ‘Forbidden Area’.

The beaches discovered by Reüning have remained the mainstay of Namdeb’s production almost continuously since their discovery. They have demanded the same degree of inventiveness and innovation as the precursor mining to the north. Huge earthmoving fleets, converted war tanks, gigantic treatment plants, boulder bouncing, high security – all were introduced, or advanced, to respond to the demands of mining these unique deposits. The diamonds did not run out as the sea was approached, and mining continued 20m below sea level protected by high sand-walls, and lately, behind sunken water cut-off walls. Perhaps the greatest innovation took place in the late 1950s, when a few adventurous diamond hunters decided to look for them under the sea.

The most notable of these was perhaps the Texas oilman, Sammy Collins, who formed the Marine Diamond Corporation, which, between 1961 and 1970, mined around one and a half million carats from under 20 metres of water.

Ya gotta love “about us” history pages minus the adventure, the monopolizing, the cartel aspect, which I just discovered here.  Sections below:

Apparently De Beers hadn’t figured out to extend the “Forbidden Zone” out far enough to sea, therefore Collins’ discovery (and enterprise; he then started to mine smaller diamonds) was able to get up and running.  However, De Beers wasn’t going to quit that easy, and later managed to squeeze the Texan out of business by threatening the Israeli manufacturers to make a choice:  If they took from the Texan company — they can forget receiving DeBeers diamonds for manufacture.

This then bankrupted Collins’ (the Texan’s) company – which, being in distress, Harry Oppenheimer (below) bought out.  Harry being the son of Ernest Oppenheimer.   

Building on Collins’s legacy, marine mining of deposits as deep as 140m under the sea, has brought Namibia the distinction of being the leading marine mineral mining country. Over the years, the various areas combined have produced around 95 million carats, including around 12 million from deep water marine mining

The account is very well-written, short, and shows how DeBeers operated — while talking about “Collins’ legacy” here, we can see how the cartel factor kicked in, and eventually put Collins ( a serious competitor) out of business, thus profiting from his expertise and startup effort.  An opening scene of a James Bond movie/Ian Fleming “Diamonds Are Forever,” is based on part of this story.  It will take perhaps 5 to 7 minutes to read this entire web page.

Please do so and begin to understand just how much this DeBeers company (and with Oppenheimer involvement, i.e., Sir Ernst and Harry both come up in the narrative) is involved in foreign government and what truly is a cartel, double-dealing, dirty playing, etc., and involving any number of South African governments in transition.  In one case a man’s contact in Portugal died suddenly on an operating table.  Namibia, Angola, Tanganyika (Tanzania), Israel, London, New York, Portugal, unbelievable stuff.

Just a sample, challengers from Jolis, Winston, Collins (all  Americans) appear to have been squeezed out — it was necessary to seize control of foreign countries to do so, of course, double-dealing, who knows how many people were killed in the process also:

Chapter 19:  The War Against Competitors

De Beers was confronted with another potential competitor in the mid-1970s, Albert Jolis. Jolis, a resourceful American, who had served in the OSS during World War 11, headed an international diamond firm called Diamond Distributors, Inc., or DDI. His father, Jac Jolis, had once worked for De Beers, and for three generations the Jolis family had a close business relationship with the Oppenheimers.

Indeed, in the late 1940s, Sir Ernest had encouraged Jolis’s father to establish a diamond-cutting factory in Los Angeles, and he had promised him a supply of uncut diamonds for the venture. Then, without any prior warning, Oppenheimer decided against the Californian venture and refused to provide any diamonds for it. No explanation was ever tendered, and the Jolis family was expected to take the loss without asking any questions.

From that point on, Albert Jolis was eager to break the dependence his family had on De Beers. He negotiated a deal in the French territory of Ubangi, which became the Central African Empire, and set up diamond-buying offices in Venezuela and Brazil. These countries provided only a small fraction of the diamonds his firm sold, and thus he still had to rely on De Beers’ sights in London for the lion’s share of his diamonds.

In 1975, however, Jolis saw a golden opportunity to acquire a major diamond concession in Angola. Until then, Angola had been a Portuguese colony, and its diamond fields, which produced 1.5 million carats of diamonds a year, had been under control of a Portuguese-based company, Diamondco, which was partially controlled by De Beers’ stockholders. Diamondco sold all of its diamonds under long-term contract to the Diamond Trading Company in London. When Portugal decided to withdraw from Africa in 1975 after more than 200 years of colonial rule, the diamond concession was again up for bidding. Angola itself was at the time on the brink of civil war.

Three rival factions shared the positions in the transition government. Each was determined to seize power for itself; and each was secretly receiving arms and mercenary assistance from foreign intelligence services. The MPLA, which had spearheaded the guerrilla war of independence against Portugal, was backed by the Soviet Union and Cuba. The FLNA, whose forces had been given sanctuary and training in neighboring Zaire, was supported by the United States, North Korea, China, and Zaire. And UNITA, which was allied to the dominant Ovambo tribes in southern Angola, had even a more curious medley of sponsors, Zambia, Tanzania and South Africa. (A fourth faction, FLEC, not represented in the government, advocated the secession of the oil-rich enclave of Cabinda and was backed by French oil interests.) In this maelstrom of international intrigue, even De Beers, with all its resources, could not immediately exert influence over the diamond fields. It was first necessary to pick the eventual winner in the power struggle.

_ _ _ _ _ _

Chapter 14: The Smugglers:

Through the brilliant financial maneuvers of Sir Ernest Oppenheimer, the diamond cartel had succeeded in gaining control of virtually all the diamond mines in the world by the early 1950s. It had made its arrangements with the government of South Africa, the colonial administrations in Angola, the Congo and Sierra Leone, and with Dr. Williamson in Tanganyika. It was fully backed by the British, Belgian and the French governments, and it was recognized by every other government concerned as the official channel for the diamond trade. There were still unofficial channels, however, that the diamond cartel did not control: the smuggling routes that led from the diamond mines and diggings in southern and western Africa to entrepots such as Monrovia and Beirut. Since the African governments did not have either the techniques or resources at their disposal to interdict the diamond smugglers, Sir Ernest decided to recruit his own diamond soldiers. In December of 1953, he instructed his London office to track down and contact Sir Percy Sillitoe.Sillitoe had been, until November of 1953, the head of the British counterespionage service known as MI-5. During the Second World War, he had organized one of the most ingenious spy operations in the history of espionage. It was called the double-cross system, and it involved converting all the German spies in England into British double agents. Since the Germans accepted the reports of these spies as bona fide intelligence, Sillitoe and his double committee, which included Harry Oppenheimer’s tutor at Oxford, Sir John Masterman, were able to feed the Germans a false picture of British activities. After the war, Sillitoe worked closely with American and French intelligence. In 1950, however, the British government was severely embarrassed by the defection of two of its diplomats from Washington “Donald Maclean and Guy Burgess” to Moscow, and the British security services came under increasing criticism. Sillitoe, who had reached the age of sixty-five, was allowed to retire in the midst of the scandal. Since retired intelligence chiefs are expected to fade quietly away, Sillitoe moved to the seaside town of Eastbourne in southern England and worked in a local sweet shop owned by relatives, selling chocolates and other confectioneries.

When Sillitoe received the invitation from Oppenheimer, he was behind the counter of his sweet shop. Within a matter of days, he had abandoned the confectionery and was on a plane flying to Africa.

At the airport in Capetown, he was met by Oppenheimer’s chauffeur and immediately driven to the village of Mulzenberg on the Indian Ocean. He arrived at a beautifully landscaped estate where Oppenheimer and his family were spending their Christmas vacation. In their initial meeting, Oppenheimer briefed Sillitoe on the smuggling problem. He explained that the smuggling of diamonds not only deprived De Beers of the value of the stolen diamonds, but far more serious, it threatened to undermine the monopoly prices for diamonds that De Beers had established. He estimated that somewhere between 10 and 20 percent of all the diamonds reaching cutting centers were smuggled goods. These illicit diamonds were undercutting De Beers’ prices. Moreover, if diamond dealers and cutters had an alternate source from which to buy their diamonds, they would be less willing to accept De Beers’ rigid conditions for doing business in the diamond trade. Oppenheimer was emphatic: He wanted the smugglers stopped.

Sillitoe admittedly had no knowledge about the diamond business, but he suggested that the techniques of counterintelligence that he had employed during the war against the Germans could effectively be used against smugglers. If some of the Individuals who illegally bought and sold diamonds could be identified, they could be “turned” into double agents for the cartel. These agents then could be used to manipulate the diamond smugglers higher up in the chain. To accomplish this feat for De Beers, Sillitoe suggested that he hire a half dozen top intelligence officers from the British secret service. These men would form the nucleus of a private intelligence service for the cartel.

After giving the matter some consideration, Oppenheimer accepted Sillitoe’s proposal. De Beers would provide the financial support, and Sillitoe would have carte blanche to recruit an elite core of agents for the “International Diamond Security Organization,” as it was eventually called.

 

_ _ _ _ _ _

~Relevant to global domination of world markets by families, essentially.  WSJ journal gives a quick retrospective on ANGLO-AMERICAN ( founded in 1917 by Ernest Oppenheimer + J.P. Morgan (the original); and quickly took over DeBeers (Cecil Rhodes having died early, age 49, in 1902)

Oppenheimer Family Bids Adieu to DeBeers

By DEVON MAYLIE and JOHN W. MILLER

[DEBEERSJMP]Evening Standard/Getty Images Founder Sir Ernest Oppenheimer in 1938.—>

JOHANNESBURG—Anglo American AAL.LN -0.32% PLC, the world’s fifth biggest miner by revenue, Friday said it would pay $5.1 billion for the Oppenheimer family’s holding in De Beers SA, ending the South African family’s long reign over the storied and often controversial diamond empire

“It is the end of an era,” said James Teeger, managing director at E. Oppenheimer & Son International Ltd., the family’s investment arm. Mr. Teeger, a spokesman for the family, said its members declined to answer questions directly.

Anglo American Chief Executive Cynthia Carroll said the company expects sales in China, India and the Gulf States to soon rival the U.S., which has 40% of the global market.

The U.S. imported $18.6 billion of diamonds in 2010, according to Geneva-based Global Trade Information Services.

“Ten years ago there was no diamond engagement ring market in these [China, India, Gulf Sate] places, and now Indian brides are running around with diamond rings,” said spokeswoman Emily Blyth. Diamond prices are up around 40% since January.

[DEBEERSJMP]ReutersNicky Oppenheimer in 2011.—>

De Beers controls around one-third of global rough diamond sales,on par with Russia’s Alrosa {{&/OR VICE VERS!}}and far ahead of rivals like Rio Tinto, RIO -1.93% which sells about 10%.

In September (2011), De Beers signed a 10-year supply agreement with Botswana, the world’s No. 1 diamond supplier. Botswana owns the remaining 15% of De Beers and has the option to increase that to 25%. Botswana said it would make a decision in the next few months.

Anglo American’s motivation in controlling De Beers—a two-fifths stake could increase to 85%—is greater diversification. Its sales, by revenue, are 26% iron ore, 22% coal, 21% platinum and 11% diamonds. “We’re not too exposed to a single mineral,” said spokeswoman Emily Blyth.

The agreement ends months of speculation that one of the world’s great business families, after resisting for years, has finally agreed to sell.

{{OPPENHEIMER FAMILY, ANGLO-AMERICAN, DeBEERS}}

It was Ernest Oppenheimer, who, along with J.P. Morgan, founded Anglo-American in 1917, and, a few years later, seized control of De Beers, which was founded by Cecil Rhodes, the British colonialist. Mr. Oppenheimer, a legendary 20th century business tycoon, oversaw the “Diamonds Are Forever” marketing slogan and tightened De Beers’s grip on global diamond supply. At one point, it mined 80% of the world’s diamonds, setting prices almost at will.

[DEBEERSJMP]Getty ImagesJonathan Oppenheimer in 2009.- – – >

De Beers now has mines in South Africa, Namibia, Botswana and Canada. It pioneered a strategy of combining diamond mining, trading and marketing, including a joint venture with LVMH Moët Hennessy Louis Vuitton SA in 2001, and has opened its own retail outlets.

The Oppenheimers prized tribal allegiance. “The family took care of its own, everybody was well paid, and a lot of loyalty was demanded in return,” said Stefan Kanfer, author of “The Last Empire: De Beers, Diamonds, and the World.” “It was assumed that each generation would produce a male heir who would be the king.”

Mr. (Ernest) Oppenheimer died in 1957, was succeeded by his son Harry, who then led the company until 1985. Ernest’s grandson, the company’s current chairman, Nicholas “Nicky” Oppenheimer took over in 1998.

The Source

By then, it was no longer his grandfather’s world. The new patriarch had to contend with Russia and Australia getting into diamonds, and a financial crisis that forced the miner to close some mines for months. In 2004, De Beers pleaded guilty to price fixing in the U.S. Its share of global production fell below 50%.

Within a year of Mr. Oppenheimer taking over, London-based Global Witness published a report implicating the miner in the trade of conflict stones, or those that help fund violence, in Angola. In 2000, De Beers agreed to a monitoring system, the Kimberly Process, to ensure diamonds don’t fund armies.

The family’s reasons for selling, say analysts, included disentangling itself from South Africa’s messy political and business worlds. It sold two South African mines earlier this year
~

The family plans to invest the proceeds in “five to ten businesses in Africa,” said Mr. Teeger, partly through a joint venture with Singapore-based Temasek Holdings Ltd. Projects include selling powdered milk in Nigeria, he said.

(SAME TOPIC, FROM ANOTHER SITE:

OPPENHEIMER DIAMOND FAMILY’S EXIT FROM DE BEERS COMPLETED
ARTICLE | 17 AUGUST, 2012 03:32 PM | BY RASHMI KUMAR

Ernest Oppenheimer founded Anglo in Johannesburg in 1917 and took control of De Beers in 1927.
{{THERE ONLY BEING WORLD WAR I IN BETWEEN THE TWO DATES!!}}

The world’s largest diamond producer in terms of revenues – it had sales of $7.4 billion in 2011, up from $5.9 billion the year before – the group was chaired by family member Nicky Oppenheimer until last year…The sale has made the already very wealthy Oppenheimer family richer. The Sunday Times Rich List reckoned Nicky’s fortune ballooned 40% after the sale to more than £4 billion (€5.1 billion).

Another (bloomburg business week, 2011) source/commentary shows they have a $3.5 billion line of credit and, of course, cash reserves, for the sale:

The transaction will increase Anglo’s holding in De Beers to as much as 85 percent, the London-based company said today in a statement. The deal will add to underlying earnings in the first year of acquisition, Anglo said….The company will fund the deal with its existing cash and a $3.5 billion credit line that’s undrawn, Finance Director Rene Medori said on a conference call. Anglo signed the five-year revolving credit in 2010, agreeing to pay interest ranging from 60 to 120 basis points above the London interbank offered rate, according to Bloomberg data. A basis point is 0.01 percentage point. Anglo has $2.2 billion of cash at hand, Medori said….

WHAT I KEEP WONDERING IS, ISN’T ANGLO-AMERICAN ALSO AN OPPENHEIMER COMPANY?  WELL, IN 2011 FINALLY THE LAST OPPENHEIMER (“Nicky,” above) STEPPED DOWN FROM THE BOARD, FOR THE FIRST TIME SINCE IT WAS FOUNDED.  HE’S THE RICHEST MAN IN SUB-SAHARAN AFRICA, ALTHOUGH NOT IN AFRICA AS A WHOLE:

By Carli Lourens – Feb 25, 2011 6:44 AM PT

Anglo American Plc, whose mines made South Africa the continent’s biggest economy, said Nicky Oppenheimer will leave the company, making it the first time a member of the family hasn’t sat on the board since they created the business in 1917.

“Anglo American has been in the psyche of every member of my family since the company was founded nearly a century ago,” Oppenheimer, 65, said in a statement today. “There comes a time when it is right to stand aside.” He was on Anglo’s board for about 37 years and is sub-Saharan Africa’s richest man, according to Forbes.com.

Anglo was founded by Nicky’s grandfather, Ernest Oppenheimer, to exploit the world’s biggest gold field, the Witwatersrand near Johannesburg. In 1929 he also took control of De Beers, later making it the world’s biggest diamond business and linking it to Anglo through cross-shareholdings between the companies.

His son, Harry, took over as chairman in 1957 and led the expansion into South African banking, steel, sugar and paper as the country’s isolation during apartheid stopped the company buying mines elsewhere. Nicky never served as Anglo’s chairman, taking the post of deputy chairman from 1983 to 2001.

The company moved its headquarters to London in 1999 to make it easier to raise money as it expanded abroad.

Cynthia Carroll reorganized management after being named chief executive officer in 2007. She advanced the strategy of her predecessor, Tony Trahar, selling assets from sugar to paper to focus on copper, iron ore, nickel and other raw materials demanded by the expanding economies of China andIndia.

Anglo-American, Apartheid, and Africa (1988article, “multinational watch”), just FYI:

ANGLO-AMERICAN CORPORATION: A PILLAR OF APARTHEID

September 1988 – VOLUME 9 – NUMBER 9

By John Summa

THE SOUTH AFRICA-BASED Anglo-American Corporation has long been a central pillar of apartheid. The company is growing rich buying the holdings of foreign multinationals that are reducing exposure in South Africa. According to Anglo’s chairman, Gavin W. H. Relly, the company is playing a “stabilizing” role in the wake of multinational corporate disinvestment. Anglo-American has taken advantage of the sell-off of South African holdings by many foreign firms, some that have felt the pressure of the anti-apartheid movement, others merely protecting the parent company’s bottom line. Anglo-American’s pool of cash reserves, estimated to be about $1 billion, has fuelled this binge. Anglo-American has become South Africa’s largest banking concern by purchasing a controlling interest in Barclays National Bank operations in South Africa. And it has reportedly bought into Ford’s South African operations by merging its Amcar facilities into a new company in which Ford will have a minority share. In 1975, Chrysler Corporation merged its operations in South Africa with an Anglo-American subsidiary.

Anglo-American controls 85 percent of the companies quoted on the Johannesburg Stock Exchange, and about 60 percent of the exchange’s total value.

The company’s holdings are so vast that it controls “47 percent of the country’s gold production, a quarter of its coal, more than half its platinum, virtually all its diamonds and crucial parts of the South African banking, insurance, food-processing, brewing, steel, auto, electronics and other industries,” according to a 1987 report.

According to Milton Moskowitz’s The Global Market Place, Anglo- American accumulated more than one hundred companies during the 1970s, including some U.S. financial and mining interests. The money for this expansion came from the Luxembourg-based Anglo subsidiary Minorco, a $2 billion international holding company. Anglo and De Beers, operating through Minorco, “pump … money into a myriad of enterprises, from zinc mines in the Yukon (Hudson Bay Mining) to natural gas deposits in Texas (Adobe Resources) to investment banking on Wall Street (Salomon Brothers).

Some studies have identified Anglo-American as the largest foreign investor in the United States; but given the incestuous nature of the mining business, where many of the investments lie, the trail is not easy to follow,” Moskowitz writes…

When Anglo-American was set up in 1917, half of the initial capital supplied came from U.S. investors, with the condition that Oppenheimer’s first choice for the company’s moniker, “African-American,” be changed to Anglo-American, because “African-American would suggest on this side our dark-skinned fellow countrymen and possibly result in ridicule,” a cable from the U.S. investors stated. The company in 1929 bought De Beers from successors of Cecil Rhodes.

Through Anglo, the Oppenheimers own shares in all of South Africa’s mining houses. In fact, the houses have cross-holdings with each other, making the block of capital quite formidable. But the extent of Oppenheimer wealth and power does not stop there. They are owners of the nation’s largest steel works, travel agency, brick factory, discount house, auto dealership and computer software firm. The Oppenheimers are not afraid to employ their power to get what they want. On the issue of apartheid they have ostensibly taken a reformist position and have crafted an image for themselves as defenders of the rights of black workers by supporting abolition of the pass laws and the Group Areas Act, the cornerstones of the apartheid political structure.

But on questions of economic justice, such as the price of black labor, sharp contradictions emerge. Anglo-American has an anti-labor history that involves the use of the repressive services of the apartheid security apparatus, as well as its own security personnel, to control and exploit workers. Being the world’s largest private employer of black labor and the world’s largest producer of gold and diamonds means Anglo is also one of the world’s biggest exploiters of cheap black mine labor.

Anglo aims to cultivate a progressive image by supporting urban improvement projects for black South Africans, by calling for reform measures and by taking a conciliatory approach toward the African National Congress (ANC) (the most notable example being a meeting between ANC president Oliver Tambo and white business leaders led by Gavin Relly). Nonetheless, the company clearly has a financial stake in the economic realities of apartheid. The ANC charter calls for nationalization of the mining and banking sectors. Anglo operations are prime targets for nationalization should a black-majority government come to power. As the ANC has said, “The boards of directors of these companies can’t make decisions for the whole nation,” a reference to Anglo and two other conglomerates that control major productive centers of the South Africa economy.

Anglo has about 250,000 black employees in South Africa. Anglo’s power was challenged by South Africa’s relatively new black miners union last year during a strike that was the worst mine owners have experienced. Anglo had originally encouraged the growth of the black National Union of Mineworkers (NUM) as a way of weakening the all-white labor unions.

This strategy failed. In August, 1987, five years after the formation of NUM, 340,000 miners walked out and demanded major pay increases and other, non-economic changes. The strike shut down over 40 mines. As both sides hardened their positions, Anglo and other mining operations began mass firings to try to break the strike. To show that it “meant business,” Anglo-American gave dismissal notices to some 60,000 of its black workers. After Anglo’s final offer was rejected by NUM, “thousands of would-be new miners were lining up at recruiting stations in Lesotho, Swaziland and South Africa’s so-called independent homelands, eager to escape crushing rural poverty, whatever the proffered terms,” one news account reported.

Black miners earn as little as one-fifth the salary of their white counterparts, sometimes being paid only $200 a month. In addition, many are migrant workers who must leave their homes and live in overcrowded, dilapidated, single-sex housing units. As one U.S. magazine noted, Anglo’s “entire structure rests on cheap labor and apartheid’s migrant labor system. Like the other South African mining concerns, it pays wages that are among the world’s lowest and its black employees earn a quarter of what whites are paid. And while white miners are given heavily subsidized modern homes, utilities and schools, blacks are crowded into stark compounds that resemble prison camps.” About 78 percent of Anglo’s profits are made inside South Africa.

In addition to buying more foreign companies, Anglo is pouring money into reorganizing its coal operations. About 40 percent of Anglo’s South Africa profits come from gold mining, in which the company is planning to invest $1 billion to merge four of its properties into a “mega mine.” The merger will create a mine capable of producing 113 tons of gold annually for the next 20 years. It will also be a huge tax shelter, according to business reports about the deal. The “mega mine” is expected to generate operating profits of over $250 million per year. Anglo’s sales have netted record profits over the last several years, but with the collapse of the value of the rand, the dollar value has actually fallen, which resulted in a reduction in dividend payments.

After the strike last year, repression against all groups fighting for a more just economic system and the abolition of apartheid was stepped up by the state security apparatus. Anglo- American, meanwhile, is increasingly being viewed as the “flip side of the same coin,” one of the many wheels that grease the apartheid machinery through tax payments and growing productive industrial, mining and financial power. “The firm’s long record of backing apartheid laws that suit its purposes but remaining silent about those that do not and repeatedly bludgeoning unionists into submission” as one news account put it, has made Anglo-American’s reformist posture seem ever more specious…

 

The concept behind the movement that produced the elitist control structure, the core of which remains hidden today, was elucidated by John Ruskin, who was appointed to the fine arts professorship at Oxford in 1870. He made an immense impact on the undergraduates, all of them members of the privileged, ruling class in England.

“He told them that they were the possessors of a magnificent tradition of education, beauty, rule of law, freedom, decency, and self discipline, but that this tradition could not be saved … unless it could be extended to the lower classes in England itself and to the non-English masses throughout the world. If this precious tradition were not extended to these two great majorities, the minority of upper-class Englishmen would ultimately be submerged by these majorities and the tradition lost.”

Listening transfixed in (Oxford fine arts professor John Ruskin) audience was Cecil Rhodes, later to be the prime exploiter of the diamond (Dc Beers Consolidated Mines) and gold (Consolidated Gold Fields) resources in South Africa, who, with the help of financing by Lord Rothschild, attained an annual income in the middle 1890’s of “at least a million pounds sterling a year (then about five million dollars) which was spent so freely for his mysterious purposes that he was usually overdrawn on his account. These purposes centered on his desire to federate the English-speaking peoples and to bring all the habitable portions of the world under their control. For this purpose Rhodes left part of his great fortune to found the Rhodes Scholarships at Oxford in order to spread the English ruling class tradition throughout the English-speaking world.

. . . Is there some part of that hard to read, or is it comprehensible yet?  “To federate the English-speaking people bring all the habitable portions of the world under their control.”  Hence when the Dutch/Boers didn’t want to federate, there was war.  Never mind the indigenous people in “the Great Scramble” (for the riches of the continent of Africa…).

NOTE — I think you should read that link, which is single-statement (or short-burst paragraphs) by YEAR, and shows EXACTLY where Cecil Rhodes comes into the mix, including his use of an American 1884 invention, the Maxim machine gun, to defeat the natives.

These tell us exactly the character of British expansionism, and is absolutely relevant when United States political leadership (can you spell “president”) AND Ivy League institutions are controlled by private equity centered in the elitist British tradition:

    • 1884: Hiram Maxim, the American inventor of the machine gun bearing his name, formed the Maxim Gun Company Ltd in 1884. The gun was to play a key role in the defeat of African tribal warriors that allowed the rapid European takeover of their lands.

      1884: General Gordon reached Khartoum in 1884 to evacuate the garrison but was besieged by the Madhi.

      1884-85: The German Chancellor, Otto von Bismarck, made up for Germany’s late entry into the Scramble for African territory. He established his nation’s credentials as an imperial power by claiming rights to land in Namibia, territory stretching from the British Cape Colony to Portuguese Angola, as well as Cameroon, Togo and, in East Africa, Tanganyika.

      1885: The Berlin Conference: Intense rivalries among Belgium, France, Germany, Great Britain, Italy, Spain, and Portugal for additional African territory, and the ill-defined boundaries of their various holdings, instigate the Berlin conference. Here the powers of Europe, together with the United States, defined their spheres of influence and laid down rules for future occupation on the coasts of Africa and for navigation of the Zaire and Niger rivers. No African states were invited to the Berlin conference, and none signed these agreements. Whenever possible, Africans resisted decisions made in Europe, but revolts in Algeria, in the western Sudan, in Dahomey, by the Matabele (Ndebele) and Shona, in Ashantiland, in Sierra Leone, and in the Fulani Hausa states were eventually defeated.

      1885: General Wolseley left Cairo to relieve Khartoum but the city fell after the massacre of the British-Egyptian garrison. The conflict took the shape of a crusading religious war, with the two fanatics, Gordon and the Mahdi, determined to wipe out the other.

      1886: Goldie’s National African Company was granted a Royal Charter allowing him to take over the lower and middle Niger in order to establish law and order there to do business. He bought some Maxim guns and took on armies 30 times larger than his own at Bida and Ilorin. The following year the British annexed Zululand.

      1886: also saw the start of the Transvaal gold rush and the founding of Johannesburg. This was a reminder that Africa’s vast mineral wealth was of central importance to the Scramble for Africa.

      1889: Cecil Rhodes established the British South African Company with Lord Rothschild’s help in 1889. This was the seed of the great De Beers company that still dominates the world diamond market today. Rhodes and Rothschild wanted the mineral rights and ultimately the territory itself *** that lay in Chief Lobengula’s Matabele land. They formed the Chartered Company’s Volunteers with 700 men and marched off to fight Lobengula’s 3000 impi warriors. However, Rhodes had armed his men with the new Maxim gun. The 0.45-inch weapon could fire 500 rounds per minute: fifty times faster than the best rifle then available.

      1893: Rhodes used the Maxim Gun for the first time at Shangari River in 1893. In the battle, 1,500 natives died but Rhodes lost only four men. He renamed Matabele Land ‘Rhodesia’ in honor of himself, having already become Prime Minister of the Cape in 1890.

p3

More than fifty years ago the [JP] Morgan firm decided to infiltrate the Left-wing political movements in the United States. This was relatively easy to do, since these groups were starved for funds and eager for a voice to reach the people. Wall Street supplied both.

p30

The original purpose for establishing [The New Republic magazine] was to provide an outlet for the progressive Left and to guide it quietly in an Anglophile direction. This latter task was entrusted to a young man, only four years out of Harvard, but already a member of the mysterious Round Table group, which has played a major role in directing England’s foreign policy since its formal establishment in 1909. This new recruit, Walter Lippmann, has been, from 1914 to the present [1966], the authentic spokesman in American journalism for the Establishments on both sides of the Atlantic in international affairs.

p31
The organization of tax-exempt fortunes of international financiers into foundations [was] to be used for educational, scientific, and other public purposes. [Wall Street elites] had to adjust to a good many government actions thoroughly distasteful to the group.

The chief of these were in taxation law, above all else, in the inheritance tax. These tax laws drove the great private fortunes dominated by Wall Street into tax-exempt foundations, which became a major link in the Establishment network between Wall Street, the Ivy League, and the federal government.

… The foundations managed to acquire control over the primary Ivy League colleges, including Harvard, Yale, Columbia, and Princeton.

p42

The substantive powers of the world were in the hands of investment bankers … who remained largely behind the scenes in their own unincorporated private banks. These formed a system of international cooperation and national dominance which was more private, more powerful, and more secret than that of their agents in the central banks.

DIAMONDS ARE NOT REALLY FOREVER (THAT’S A MYTH) — “THE OVERHANG” (2009 ARTICLE)

[[THERE IS NO END OF INFORMATION ON THIS TOPIC. I ENCOURAGE PEOPLE TO CONSIDER HOW MUCH OF THE CURRENT USA LEADERSHIP, AND WITH IT, POLICY HAS INFLUENCE FROM THIS PARTICULAR PERSON AND HIS TRUST. IT SHOULD ALSO BE NOTED THAT FROM THE BEGINNING IT WAS RACIST. A SINGLE BLACK SCHOLAR WAS ELECTED IN 1907, HOWEVER SOUTHERN WHITES (PARTIC. FROM NORTH CAROLINA) OBJECTED. NONE OTHER WAS ELECTED UNTIL 1963. A “LADY HALL” PETITIONED TO INCLUDE WOMEN, EARLY ON. NO WOMEN WERE ADMITTED TIL EVEN LATER, CA. 1970, OR 1980. NOT GOOD NEWS CONSIDERING THE POPULATIONS THEY WISH TO ADMINISTER (I.E., THE GLOBE) ARE ABOUT HALF WOMEN AND I’M SURE FAR MORE THAN HALF, PEOPLE OF COLOR. THE GENERAL SCHEME IS, THERE WILL BE WORLD PEACE — IF WE ARE IN CONTROL OF THE WORLD. HOWEVER, PENDING THAT, (AS RHODES’ OWN HISTORY DOCUMENTS) AND IF OPPOSED (SEE “SHARK ISLAND” JAMESON RAID WHICH PROVOKED BOER WARS, APARTHEID, ETC., THERE WILL BE TROUBLE.]]

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