document: A stone 's throw from the smelly Smithfield meat market is an office building complex with no sign or anything to attract the attention of Londoners hurrying by . Mounted cameras , jumpy guards and heavy doors keep out the uninvited . The gold-colored interior is hushed and luxuriously decorated . This is the Central Selling Organization , London-based marketing arm of the De Beers diamond empire , controlled by the wealthy Oppenheimer family of South Africa . Its experts sort mounds of rough diamonds constituting 80 percent of the world 's annual production . But scratch the surface of this secretive world , and the diamond business loses some sparkle . Sales have declined sharply , and the 56-year-old cartel is facing pressure to give producers better terms and allow them to sell more of their own gems . Although its prosperity and control of the world diamond industry looks unchallengeable , the pressures could loosen its grip and crimp its profits . `` This year is going to be a critical one for De Beers , '' says Diamond Intelligence Briefs , a trade publication . De Beers ' South African interests face an uncertain future , largely because of a newly energized political will by the black majority in that country , an important diamond producer . The African National Congress has pledged to nationalize South Africa 's major sources of wealth if it takes power . Apparently attempting to limit risk , De Beers recently announced it would split South African and foreign interests into two publicly held companies , one based in Switzerland . After growth spurts of 19 percent in 1987 and 35 percent in 1988 , rough diamond sales fell 2 percent to $ 4.09 billion last year because of slowing economies , high interest rates and the organization 's two double-digit price increases in 1988 and 1989 . The decline was sharpest in the second half of the year , when sales fell 24 percent from the first six months . `` There was a very definite , noticeable slack in demand , '' said analyst Peter Miller of Yorkton Securities Inc. in London . The decline has limited De Beers ' scope for raising prices . This past week , De Beers announced it was increasing prices 5.5 percent , compared to a 15.5 percent increase a year earlier . The organization must this year renegotiate five-year contracts with Botswana , the second biggest diamond producer in terms of value , and Argyle Diamonds of Western Australia , the biggest producer in terms of quantity . The government of newly independent Namibia , meanwhile , is expected to demand a one-fifth stake in Consolidated Diamond Mines , De Beers ' Namibian subsidiary . The organization sells most of the Soviet Union 's West-bound diamonds , but the Soviets , the biggest value producer , have been acting more independently and squeezing the cartel 's margins , the experts say . Jack Lunzer , managing director of IDC Ltd. , an independent diamond distributor in London , said De Beers undoubtedly will continue to control the major part of world production , but its marketing arm 's profits will fall . The effect has n't been felt yet ; De Beers ' profit rose 37 percent to $ 1.1 billion in 1989 . Few diamond-producing countries dare sell their output outside the organization , and some bold enough to leave have returned because of the difficulty in peddling diamonds alone . Zaire returned in 1983 after a two-year split . Angola , which broke in 1985 , has been negotiating its re-entry . `` We are as strongly in control of the diamond market as we have been for many years , '' said Tim Capon , the cartel 's director . The organization buys rough diamonds from De Beers ' own mines , which represent 30 percent of world production , and from producers in Tanzania , South Africa , Zaire , Botswana , Namibia , Australia and the Soviet Union . It reveals few details about security . It was robbed once , in the early 1980s , when some diamonds were snatched as couriers carried them from one building to another . De Beers picks its 160 or so buying customers from thousands of hopefuls . Ten times a year , at sales called `` sights , '' the clients are offered a selection of diamonds chosen by the organization and placed in a simple cardboard box . The buyer basically can take it or leave it . The gems then go to cutters in the world 's major diamond-cutting centers : Bombay , India ; Tel Aviv , Israel ; Antwerp , Belgium ; and New York . Of all diamonds mined , only 15 percent will end up in jewelry , but these represent 80 percent of the value of the world 's diamond production . The rest are put to industrial use . The organization is fighting the lackluster sales trend by trying to create new demand . Last year , it spent $ 160 million on advertising and promotion , trying , for example , to boost purchases of men 's diamond jewelry . De Beers 's achievement over the decades has been to mass-market what was once an aristocratic luxury without greatly diminishing its value . Today , diamonds remain `` the gem of gems , '' although millions of people own them . De Beers insists it seeks long-term stability and prosperity for the industry , saying price fluctuations would undermine confidence in the value of diamonds . So far , it has succeeded . While other commodities markets have suffered repeated convulsions , rough diamond prices have n't fallen since the organization started announcing price changes in 1964 . Even its fiercest competitors laud De Beers for putting up considerable amounts of money and assuming the risks to develop mines and support the market . During the early 1980s , when high interest rates caused the worst diamond slump since the 1930s , the organization prevented the market 's collapse by doubling its diamond stockpile to nearly $ 2 billion worth . But producers criticize the organization 's secretiveness and what they call its arbitrary valuation system . Some want more of the industry 's millions of jobs relocated in their own countries . Said Lunzer : `` It 's not unnatural for people in the producing countries to say , ` Are we getting a proper share of the value of our national resource ? '' ' After reviewing a complaint filed by the British mining company Consolidated Gold Fields PLC alleging anti-competitive practices , Britain 's Office of Fair Trading decided in August against formally investigating whether the organization abuses its monopoly . Gold Fields acknowledged the complaint was a defensive maneuver against a hostile , and ultimately unsuccessful , takeover bid from Oppenheimer-controlled Minorco SA last year . Formally known as De Beers Consolidated Mines Ltd. , and based in Kimberley , South Africa , the company was formed in 1888 by the British industrial colonialist Cecil Rhodes . Sir Ernest Oppenheimer , a diamond merchant , became chairman of De Beers in 1929 and five years later formed Diamond Trading Co. , the precursor of today 's cartel . Oppenheimer , who linked the diamond business with his extensive Anglo American Corp. gold-mining interests , is credited with steering De Beers through the Depression . He died in 1957 and was succeeded by his son , Harry Oppenheimer , who has made the company more internationally minded and therefore less vulnerable . Now 81 , Oppenheimer still serves on De Beers ' board of directors , of which he previously was chairman . His 44-year-old son and heir apparent , Nicholas , is deputy to Chairman Julian Ogilvie Thompson .
extractive_keyphrases: de beers diamond empire central selling organization diamond business world diamond industry south african interests diamond producer rough diamond sales