In 13 July 2004 mining giant De Beers pleaded guilty to a charge of pricing fixing. In 1994, the US Justice Department had charged DeBeers with conspiring to fix the prices for industrial diamonds – the rough stones used in a variety of cutting and polishing techniques – in both the United States and elsewhere. General Electric Company, indicted as a co-conspirator in the case, was acquitted years before, but the charges remained as a shadow hanging over DeBeers for years.

The spectre of the charges prevented De Beers’ executives from travelling to the US to do business, at the risking of arrest, and closed any entire market for the company. The decision was thus taken to admit guilt, resulting in the group paying a $10-million fine to settle the 10-year-old indictment and paving the way for the company to start doing business directly within the American market.

Now it’s fair to say that any top-tier executive of a multinational corporation is under enormous pressure and has to make tough decisions. It is simply a consequence of working at that level.

Setting aside for a moment the question of De Beers’ actual complicity in the charges, having to make the call as to whether or not to plead guilty to a crime is not one that one expects to make as a business executive.

These are the kind of decisions that De Beers chairperson Nicky Oppenheimer has had to deal with. And most would say that despite the somewhat unpopular nature of De Beers, Oppenheimer has taken the company’s troubles in his stride and dealt with them in an exceedingly calm manner.

His choice of parents

As the son of Harry Oppenheimer and grandson of Ernest Oppenheimer, most would say that Nicholas F. Oppenheimer has had it easy. Of course, there is no denying that his choice of parents was to his advantage, but the ease, or lack thereof, of one’s life is all relative. His current success as the chairperson of one of the world’s most successful privately owned companies has as much to do with his own effort as it has to do with the opportunities that were presented to him.

Oppenheimer received his education in England at Harrow School and Christ Church, Oxford where he graduated with an MA in Philosophy, Politics and Economics.

Despite his lofty university credentials, his first job saw him working as a bottle-washer – a job that a mining journalist colleague once described as “right next to making tea” – in the gold division of Anglo American.

His beginnings in the menial end of the business didn’t last; being an Oppenheimer, he would eventually move up the corporate ladder. That he eventually found his way into the milieu of the De Beers and Anglo American executive is not terribly remarkable – that he has remained there for the last few decades, is.

Acumen cannot be faulted

His acumen cannot be faulted; during his tenure, the company transformed itself from the monolithic corporate bully that so tightly controlled the diamond economy by holding sway over supply to a company that worked to increase demand. In the last few years De Beers has become more profitable with 40% market share, than it was when it had an 80% market share.

Prodded on by the NGO community, De Beers effectively eliminated the blood diamond issue when it helped to devise the Kimberley Process – a way to ensure that buyers were getting only diamonds that had been mined legally. Unmistakably the right thing to do, the neutralising of the blood diamond issue also had a sound business rationale: the restoration of the gems’ long reputation and the elimination of a source of excess supply.

Oppenheimer’s toughest decision, however, would come in 2001. In June of that year, Nicky Oppenheimer took the decision to delist a company that had been on the JSE Securities Exchange since 1893. Oppenheimer held a particular view of the company and the diamond market at the time that shareholders were not convinced by. The delisting was a risky move.

In a 2005 interview with David McKay of miningmx.com, Oppenheimer said of the decision to go private: “My perception of where De Beers was going didn’t coincide with shareholders. I thought the company was doing unbelievably well. We’d started our strategic review and throwing off results in the meantime. But the shareholders simply didn’t believe me. In those circumstances, if shareholders don’t believe you – or recognise the value – then make them an offer, and if they think they’re getting good value, they’ll sell to you.”

It was a risky move that ultimately benefited the company. That decision was likely the major linchpin that allowed for the formation of the Kimberley Process in the first place and freed Oppenheimer to take the decisions that today have resulted in its increased profitability. “I took the risk and I put my family’s money where my mouth was,” says Oppenheimer. “And I was right.”

In recent years Oppenheimer has become a bit of an outspoken advocate for African rights. Not a total surprise, given his family’s commitment to corporate social investment. The tack he has taken, however, is a bit surprising. “May I suggest that people in many African countries could be suffering from donation fatigue?” he asked in 2005, at a speech to the International Institute for Strategic Studies.

He contends that since colonisation, a staggering $1 trillion has been ineffectively launched at Africa in what amounts to Westerners trying to assuage guilt, rather than used in a well-thought-out plan to improve the state of the continent. The unending torrent of aid – and he includes debt cancellation as aid – creates a dependence that Africans can ill afford to have.

I am an African

He was noted to have said in an interview sometime after the speech that, “Because I am an African I reserve the right to say that Africa does not exist simply to make people in this country [the UK], or anywhere else in the developed world, feel good about themselves.”

His outspokenness is somewhat surprising, given his predilection for privacy and understated-ness, a trait which extends right into the running of De Beers itself. An unremarkable door with the words “17 Charterhouse Street” lightly engraved in the white stone above it does very little to announce that the offices of the biggest name in diamonds lie behind it.

His support for such a cause, however well-intentioned, could be viewed as facetious by some. As a Forbes-listed billionaire, surely a man as affluent as Nicky Oppenheimer cannot conceive of what the life of a typical African citizen may be like? Responding to just such a question from the Guardian newspaper, he responded by saying: “I’m sure some people might say that, but it’s not a reason not to do the right thing. I am one of the affluent rich living the good life. But I like to think that I am doing my bit to resolve the problems of Africa and am certainly committed to Africa in the long run.

“I am an African. I live there and my children live there and as far as I understand, they intend to go on living there.”

Q&A with Nicky Oppenheimer

The Oppenheimer name is legendary and synonymous with wealth, at least in the South African context. Growing up, was there an awareness on your part of your family’s legacy?

Growing up as an Oppenheimer you always knew that you had a privileged background, but this was coupled with a strong emphasis on the obligation that it brought with it.

You’ve said in the past that you feel Africa is suffering from “donor fatigue”. What led you to this conclusion?

There is certainly a place for donors, but they are there to mitigate an immediate problem. My concern is that it is all too easy to come to rely on charity, which requires poverty and deprivation. What the developing world needs is real growth and for that they need investment and an ongoing interest in that investment involvement, not a donation.

How should we be dealing with Africa’s economic woes?

Africa needs to play to its strengths in these difficult times. We are rich in natural resources and the flora and fauna of Africa is unique. We need to husband both and make certain that their proceeds are used sensibly and sustainably to ensure that all parts of society grow and evolve.

As one of the world’s foremost businessmen, what do think can be done about the global economic crisis? Is it as serious as it is made out to be?

The world is in serious crisis, but the world’s leaders are reacting more quickly and decisively than has happened in the past. Worldwide growth will return, but as it does I hope the excesses that led to the crisis will not be repeated.

What is the best course of action for South Africa to follow to ride out the crisis?

South Africa should follow conservative and careful policies (like the rest of the world). We have a proverb in Africa that says: ‘Smooth seas do not make skilful sailors’. As the year progresses, we will all be occasionally seduced by the siren voices of quick fix and short-term gain. My advice is to ignore them, and rather to be focused on long-term sustainability and good governance.

How stable is the mining industry in general right now?

We have seen dramatic declines in the prices of nearly all natural resources, which has led to slower production and job losses. But those resources will be needed once more as the world returns to a normal business cycle.

How difficult was it to make the decision to delist De Beers in 2001? And how do you feel about it now?

It was an easy decision, as my perception of the value of De Beers was very different to the market’s. It was a good deal then and remains a good deal today.

Conspiracy theorists persist that there is a massive storehouse of diamonds in Amsterdam for example, and that De Beers’ tight control over the flow of the gem is what actually keeps the prices so high rather than genuine supply-and-demand principles. Is it just urban legend or is there some measure of truth in it?

Sadly, just urban legend. I sometimes wish De Beers was more like some of those myths, but we are a normal company with all the problems and opportunities that implies.

Men in your position tend to work well past retirement age. Are you planning to carry one past your 65th?

I certainly do not believe in remaining in harness forever – one of the most important decisions anyone can take is the time to step aside.

How much of your success do you attribute to your own efforts and how much was “accident of birth”, as the saying goes?

Choosing one’s parents carefully certainly helps, but of course life involves more than just that.

What is your impression of Jacob Zuma?

I do not know him well, but he seems a man of the people.

Will he make a good president?

Ask me at the end of his term in office.


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