Rhodes Amalgamates Kimberley Diamondfields
Rhodes Amalgamates Kimberley Diamondfields refers to the significant historical developments surrounding diamond mining in Southern Africa during the late 19th century, particularly involving Cecil Rhodes. Following the discovery of diamonds in Griqualand West in 1867, a rush of prospectors transformed the region, leading to the establishment of Kimberley, a city that quickly emerged around these lucrative diamond mines. Rhodes, initially seeking health improvement, became a key player in the diamond industry after arriving in the diamondfields in 1872. Alongside partners like Charles Dunell Rudd, he recognized the need for consolidation among the mines, leading to the formation of De Beers Mining Ltd. in 1880 and later the De Beers Consolidated Mining Company Ltd.
By strategically buying shares and merging operations, Rhodes achieved near-total control over diamond production, holding 95% of the market. His consolidation efforts not only provided immense wealth but also laid the groundwork for political influence in the region. Rhodes's actions and policies contributed to shaping the socio-economic landscape of Southern Africa, interweaving the interests of European settlers and local African communities, which eventually influenced the trajectory towards apartheid and conflicts such as the South African War. His legacy remains complex, reflecting both the rapid industrial growth and the substantial human and social costs associated with colonial expansion in the region.
Rhodes Amalgamates Kimberley Diamondfields
Date March 13, 1888
The discovery of one of the world’s richest diamondfields in 1867 began the transformation of South Africa from an obscure outpost of the British Empire to an industrial power, and Cecil Rhodes used his successful amalgamation of the diamondfields to maximize their profits, while giving him the wealth he needed to play a powerful role in the expansion of British imperial influence in Southern Africa.
Locale Kimberley, South Africa
Key Figures
Cecil Rhodes (1853-1902), English businessman who became an influential imperialistBarney Barnato (1852-1897), British financier who became Rhodes’s main competitorAlfred Beit (1853-1906), German financierCharles Dunell Rudd (1844-1916), English entrepreneur who became Rhodes’s partner
Summary of Event
Before the discovery of diamonds near South Africa’s Orange River in 1867, Southern Africa was primarily an isolated farming region of little interest to Europe. The discovery of diamonds, and the later discovery of gold in the Transvaal, created a rush of people to the area that led to serious conflicts among the region’s African, Afrikaner (Boer), and English communities. The struggle for control of the production of diamonds and the wealth and power that the diamonds created became important factors in the political development of Southern Africa. No one person was more important in these developments than Cecil Rhodes.
In 1871, a large source of diamonds was found at Colesberg kopje on the Vooruitzicht farm of Johannes Nicholas De Beers and Diederik Arnoldrus De Beers near the Vaal River in Griqualand West, an autonomous area near the Afrikaner-ruled Orange Free State and the British-ruled Cape Colony. This site would soon become famous as the “Big Hole” of the Kimberley diamondfield. Another valuable site one mile away became the De Beers Mine. Two smaller mines, Dutoitspan and Bultfontein, were also developed nearby. The large influx of people to this site created the city of New Rush, which was quickly renamed Kimberley after the British secretary of state for the colonies.
One of the young men who flocked to the new diamondfields was Cecil Rhodes, a young Englishman who had come to South Africa to improve his health at his brother’s cotton farm in the Natal. Rhodes had a long-range dream of expanding the British Empire throughout the world. To play a role in achieving this dream, he knew that he needed wealth and power, and diamonds could provide both. He was nineteen when he followed his brother to the diamondfields in 1872.
Rhodes began by overseeing African laborers on 31-by-31-foot claims at Kimberley. However, he was a gifted businessman and was eager to try new business opportunities. He always worked with able partners, and an important partner of his from the beginning was Charles Dunell Rudd. One of the most profitable early businesses at the diamondfields was pumping water from the pits. Rhodes and Rudd ran a pumping service and accepted mine claims in payment for their service. They targeted the De Beers Mine for ownership. Even in the first years, Rhodes knew that all the little mines should be amalgamated. As he and Rudd increased their stakes in the mines, they formed De Beers Mining Ltd. in 1880. Having a partner also gave Rhodes the opportunity to return to England to attend Oxford University, where his dreams of imperial Great Britain were strengthened.
The diamond market was then, and always has been, volatile. Diamonds are expensive luxury items with limited demand, so oversupplies can easily lower their prices. Several individuals at Kimberley realized that the amalgamation of mine ownership would be necessary to effectively control diamond production. As events played out, it became clear that amalgamation would be a contest between Rhodes and Barney Barnato, another English immigrant. With help of partners such as his German financial adviser, Alfred Beit , and Rudd, Rhodes focused on controlling the De Beers Mine, and they succeeded in 1887.
Meanwhile, Barnato and his partners were consolidating their ownership of the Kimberley Mine in the Kimberley Central Mine Company. Rhodes made his first move on the Kimberley Mine in 1887 by trying to buy the part of the mine that was not already owned by Barnato, with financial support from the Rothschild banking house. Rhodes sold his claims to Barnato in return for 20 percent ownership in Barnato’s Kimberley Central Mine Company. He then began a campaign to buy up shares of Barnato’s company. On March 13, 1888, he formed the joint De Beers Consolidated Mining Company Ltd. By 1889, he had brought the Bultfontein and Dutoitspan Mines into his company, giving him effective control of the diamond production at Kimberley.
Rhodes now controlled 95 percent of the world’s diamond production. He significantly reduced the labor force to cut back production to keep diamond prices at a profitable level. He offset the dislocations caused by his labor cuts by providing needed social services to the people of Kimberley. He also established a system of selling diamonds through a single syndicate to gain additional control of the market. Rhodes now had firm control of both diamond production and the city of Kimberley. Meanwhile, he also gained a profitable share of the new gold mines opening on the Transvaal’s Witwatersrand.
Meanwhile, Rhodes was also building a wide political base along with his wealth. Griqualand West became part of the Cape Colony in 1880, and Rhodes was elected to the Cape assembly the following year as the representative of a rural district. He would serve in the assembly until his death. From 1890 to 1895, he was prime minister of the Cape Colony. He used his political power base to pass numerous laws that promoted the interest of mining and industry. He also used his wealth and political power to promote the colonization of what became the modern nations of Zimbabwe and Zambia.
Significance
Cecil Rhodes was a dominant figure in the development of the Southern Africa region during the late nineteenth century and very early twentieth century. The amalgamation of the Kimberley diamond companies provided him with great wealth. Many men grew wealthy from South Africa’s diamond and goldfields, but Rhodes used his wealth to help set the social and political agenda for the region. He was instrumental in institutionalizing the relationship between Europeans and Africans that would lead to South Africa’s apartheid policies during the mid-twentieth century.
Rhodes was also deeply involved in the conflict between Afrikaner and English communities that led to the South African War and later to the creation of the Union of South Africa. Moreover, he played an important role in bringing Southern Rhodesia (now Zimbabwe), Northern Rhodesia (Zambia), Bechuanaland (Botswana), and Nyasaland (Malawi) under British rule. It is unlikely that he could have done any of these things, had he not been successful in amalgamating Kimberley’s diamondfields.
Bibliography
Kanfer, Stefan. The Last Empire: De Beers, Diamonds, and the World. New York: Noonday Press, 1993. Interesting history of De Beers, about half of which covers the Kimberley diamond discoveries and Rhodes’s campaign to amalgamate the mines.
Leasor, James. Rhodes and Barnato: The Premier and the Prancer. London: Leo Cooper, 1997. Dual biography that examines the interaction between the two key figures in the Kimberley diamond companies’ amalgamation.
Rotberg, Robert I. The Founder: Cecil Rhodes and the Pursuit of Power. New York: Oxford University Press, 1988. Biography of Cecil Rhodes by a leading historian of Africa who is well qualified to put Rhodes in a broad historical perspective.
Thomas, Anthony. Rhodes: Race for Africa. New York: Thomas Dunne Books, 1997. Study of Cecil Rhodes’s imperialist schemes. Chapter 5 covers his diamond industry activities.
Worger, William H. South Africa’s City of Diamonds: Mine Workers and Monopoly Capitalism in Kimberley, 1867-1895. New Haven, Conn.: Yale University Press, 1987. Fine scholarly study of the diamondfields during the period in which Rhodes was actively involved. Pays particular attention to the role of African mine workers.