Diamonds have been identified as valuable but expensive gemstones for many decades. Diamonds were extremely rare and were only found in India and Brazil until the end of the 19th century (Vogelsang, 2005: 5). After the discovery of diamonds in South Africa, the diamond industry began to flourish. Diamonds then became very abundant and inexpensive to produce. To keep the value of diamonds as high as they were when they were still rare, a diamond cartel was created. A cartel is defined as a group of companies that come together to make production and pricing decisions (Cartel Theory of Oligopoly, n.d.). The diamond cartel therefore aimed to maintain high prices in order to maximize suppliers' profits by limiting supply. This essay will analyze the history of the diamond cartel, including diagrams illustrating what the price of diamonds would be with or without the use of a cartel. The idea that diamonds are the only suitable stone that can be used in engagement rings will also be commented on. In addition, special attention will be paid to the role of the diamond cartel in determining the price of diamonds. In 1867, huge deposits of diamonds were accidentally discovered near the Orange River in South Africa. Cecil John Rhodes arrived at Kimberley Mine in 1874 and eventually began purchasing claims in the surrounding mines. Rhodes established DeBeers Consolidated Mines in 1888 to manage its assets. DeBeers allowed Rhodes and other suppliers to control the overall supply of diamonds by setting high market prices and regulating diamond production in the market (Spar, 2006: 197). Ernest Oppenheimer took control of DeBeers in 1929, after Rhodes' death in 1902. The Central Sales Organization...... middle of paper ......April 14, 16].2. De Beers fights to restore monopoly; challenges await us. 2011. Available: http://articles.nomictimes.indiatimes.com/2013-03-24/news/37981320_1_world-diamond-council-alrosa-rio-tinto [April 16, 2014].3. A diamond market that is no longer controlled by De Beers. Available: http://www.kitco.com/ind/Zimnisky/2013-06-06-A-Diamond-Market-No-Longer-Controlled-By-De-Beers.html [April 15, 2014].4. Lab Created Diamonds FAQ | Diamonds created in the Gemesis laboratory. 2014. Available: http://gemesis.com/education/faqs/ [April 18, 2014].5. Parkin, M. 2012. Economics. Cape Town, South Africa: Pearson Education South Africa. p. 275.6. Spar, D. 2006. The Journal of Economic Perspectives. American Economic Association. pp.195-197.7. Vogelsang, I. 2005. The international diamond cartel. p. 5-7. Available: http://are.berkeley.edu/~sberto/debers.pdf [2014, April 16].