The Horrors of the Diamond Boom

The colony known as German Southwest Africa (now the nation of Namibia) was born out of a monumental swindle. In 1883 Adolf Lüderitz, a tobacco merchant and adventurer from Bremen, dispatched an agent to Angra Pequeña, a desolate natural harbor on Africa’s South Atlantic coast and the gateway to one of the last territories on the continent that hadn’t been claimed by European powers. After trekking 124 miles through the bush to a settlement called Bethanie, the agent persuaded Josef Frederiks, a chief of the Nama people, to sell the scorpion-infested desert around Angra Pequeña for gold valued at £100 and two hundred loaded rifles. (Frederiks’s European name was probably bestowed on him by a missionary from the Rhenish Mission Society, a German Protestant group that had been active in the territory since the 1830s.) Three months later, the agent paid Frederiks an additional £500 and sixty rifles for a 10,000-square-mile sweep of land between Angra Pequeña and the Orange River, which formed the northern border of Great Britain’s Cape Colony.

Frederiks was barely literate, and he also had grievously misunderstood the size of the territory he was selling: Lüderitz’s agent had drawn up the contracts using German square miles, thirty times larger than the English square miles familiar to Frederiks. By the time he got wise to the duplicity, it was too late. In 1884 German chancellor Otto von Bismarck, enticed by the possibility that diamonds and other minerals lay beneath the sands, recognized Lüderitz as the ruler of a new German possession called Lüderitzland.

Lüderitz dreamed of a diamond strike that would make him the German counterpart of the mining magnate and Cape Colony prime minister Cecil John Rhodes. Instead he died penniless after his boat capsized during an expedition to find the mouth of the Orange River in 1886. (His body, presumably swept into the frigid waters of the South Atlantic, was never recovered.) Over the next two decades, the governments of Bismarck and his successors didn’t focus on diamond hunting; they built railroads and tried to entice German farmers to settle the largely waterless territory. But these efforts led to the creation of just 440 farms occupying 2 percent of the total land. Ranching projects were also failures, with entire herds of cattle succumbing to rinderpest and other diseases.

Then, in 1908, a railroad worker stumbled onto a trove of gems in the dunes beside some track under repair in the Namib Desert near Lüderitz Bay, the ramshackle settlement that had risen at Angra Pequeña. A diamond rush immediately followed and utterly changed the once-forlorn colony’s fortunes. Over the next decade, until Great Britain seized the territory during World War I, Germany exported millions of carats to Antwerp and markets around the world—principally the United States—engaging in a fierce competition with Rhodes’s company, De Beers, for global dominance of the diamond trade. The boom whetted Germany’s thirst for empire and created a system of exploitation that resembled King Leopold II’s murderous rubber economy in the Belgian Congo. But like the deal that gave Lüderitz control of the territory in 1883, the entire industry was something of a swindle. Its success rested on shrewd marketing campaigns and strict production controls, which tricked consumers into believing that diamonds were a rare commodity.

As Steven Press writes in Blood and Diamonds: Germany’s Imperial Ambitions in Africa, his deeply researched, often horrifying, sometimes dense study of the country’s entanglement in the diamond trade, the architect of the gem scheme in southern Africa, as well as the model for the German colonizers, was Cecil Rhodes. The sickly son of a vicar in Hertfordshire, England, Rhodes had arrived in the Cape Colony as a seventeen-year-old in 1870, months after miners struck a mother lode in the town of Kimberley. The diamonds lay deep belowground, inside a cluster of vertical structures that came to be known as “kimberlite pipes”: funnels in the earth’s crust through which molten material containing the gems—carbonate crystals compressed over millions of years—rises toward the surface. Some stones exploded out of the ground in bursts of magma and wound up deposited in riverbeds, such as the first authenticated diamond discovered in Africa, a 21.25-carat gem picked up by a fifteen-year-old boy on the banks of the Orange River in the farming village of Hopetown in 1866. Those in Kimberley lay inside pipes about seven hundred feet below the earth’s surface, which were exposed by miners using picks and shovels over three decades. The “Big Hole” would become the world’s richest diamond mine, producing more than three tons of the precious stones before it shut down in 1914.

Rhodes got his start renting water pumps to diamond miners and began investing the profits from that operation into buying out the claims of competitors. Early on he recognized that the huge output of diamonds from the Kimberley mine belied the perception, formed in the early days of diamond mining in India and Brazil, that the stones were hard to come by. Employing a strategy that would be imitated by the Germans three decades later, “Rhodes proposed a monopoly of production sufficient to keep diamonds scarce in accordance with demand, supply, and culture,” Press writes.

Over the course of the 1870s, he worked to realize this vision by amalgamating rivals around the De Beers mine, one of the three diamond-bearing pipes about a mile from Kimberley. In the 1880s, Rhodes successfully applied his tactics to Kimberley itself, buying out or merging with rivals before ultimately folding his diamond assets into a new company, De Beers Consolidated Mines.

Rhodes’s second strategy, also copied by the Germans, was to utilize brutal tactics to keep his labor costs to a minimum and prevent theft. In 1885 he forced indigenous miners in the Cape Colony to sign contracts that required them to live in guarded compounds, where they were kept prisoner in abysmal conditions until their term of employment was over. Thousands of convicts loaned out by the Cape Colony for cheap labor joined them in these squalid and disease-ridden camps. By the early 1900s, according to Press, Rhodes and De Beers controlled 95 percent of the world’s diamond production and 98 percent of South Africa’s. Rhodes boasted, not with great exaggeration, that it was “the richest, the greatest and the most powerful company the world has ever seen.”

Across the border in German Southwest Africa (as the colony became known after Lüderitz’s death), Rhodes’s counterpart was Bernhard Dernburg, Germany’s forty-year-old colonial secretary, who made an indelible impression when he arrived from Berlin in 1908 to oversee the nascent diamond mining. Press vividly describes the aristocratic Dernburg as

a tall, potbellied, broad-shouldered man, his arms flabby, his cheeks pale, his nose long and bulbous. Beneath the black top hat he wore unfailingly when outdoors, his unkempt beard stretched up so far that it almost touched his blue eyes. Those eyes in turn told a story: shot full of blood from overwork, they sat amid unruly brows, inflamed lids, and multiple folds of skin that resembled bags on bags. Photographs could do little to hide the problem.

Dernburg seemed comically out of place in the hostile terrain. The trip to southern Africa, Press writes, in one of the most entertaining sections of his book, “precipitated an outbreak of eczema and nerve pain in his arms and legs, which he attributed to unusually heavy use in climbing some rocks to get to the higher streets in Lüderitz Bay.” Averse to physical activity,

Dernburg ordered a special four-wheel-drive Mercedes manufactured for his trip. But when that plan stalled, he had to ride around Lüderitz Bay in a partly enclosed mule-cart, with the dust from wind irritating his labored breathing.

At one point, he was coaxed into participating in a publicity stunt that obliged him to crawl on the desert floor as if digging for precious stones, “clutching a rough diamond but evidently straining to retain his composure before cameras.”

Yet Dernburg also proved as savvy as Rhodes when it came to maximizing value from the diamond fields. The Germans already had one important advantage in their competition with De Beers: almost all of German Southwest Africa’s gems were buried just a few feet below the surface, and they were sometimes even scattered in the sand, reducing production costs to one quarter of those in South Africa. (Lüderitz had assumed that the stones would be entombed hundreds of feet beneath “blue ground”—a type of igneous rock that covered the four major diamond pipes in South Africa. It was an error that was largely responsible for his failure, and those of subsequent prospectors, to find any diamonds for more than two decades after Germany appropriated the territory.) Soon after his arrival in German Southwest Africa, Dernburg created the Forbidden Zone, or Sperrgebiet, an area in the Namib Desert nearly the size of Belgium, to eliminate freelance prospectors and sort out competing claims. Dernburg grandfathered in a few independent mining outfits, but the vast majority of the Forbidden Zone was handed over to the German Colonial Corporation, the entity that Bismarck had set up to run the colony after Lüderitz’s death, whose shareholders became extravagantly rich.

Dernburg made a number of other shrewd business decisions. When De Beers tried to buy up stock in the German Colonial Corporation, he issued more shares and diluted the South African company’s holdings. To bring all diamond selling under one roof, he created the Regie, a state-approved cartel administered by Walter Rathenau, the German industrialist who later directed Germany’s World War I economy and served as foreign minister in the Weimar Republic. The Regie forced an output quota on every miner inside the Forbidden Zone and imposed prison terms and heavy fines on those who trespassed or traded in unregistered stones. It also set up a spy network to maintain control over every diamond in the territory, forcing independent prospectors to seek gems in the hostile wilderness outside the Forbidden Zone. Press evokes the horrors of this landscape:

Such ventures brought civilians farther into the desert, to both the north and south. But to move into the distant, shifting dunes of the Namib was to court death, even if one wore a helmet, glass goggles, and a respirator to keep sand out. Harried Europeans periodically climbed seventy-foot-high cliffs along a southern path that hugged the coast to avoid drowning. Such an expedition could easily extend two hundred miles away from Lüderitz Bay, taking as long as thirty-three days round trip and leaving a trail of deserted pack animals, spooky campsites, scorpion bites, and corpses.

Dernburg also undercut De Beers’s dominance of the industry by bypassing the London syndicate, a powerful group of European businessmen who lent money to De Beers and served as its exclusive channel for worldwide diamond sales and marketing. He set up a rival syndicate in Antwerp, the Belgian port city that had once been the diamond-cutting center of the world; by 1900 the gem-cutting business had shifted to Amsterdam, and the city had fallen on hard times. Revitalized by the new trade from German Southwest Africa, its craftsmen cut the gems and the Antwerp syndicate fed the lucrative market in the US, where the middle and working classes hungered for small, affordable diamonds—exactly the kind that were plentiful in the Forbidden Zone. Thanks to a rise in disposable income and to the marketing of diamonds as the ultimate symbol of perfection, the gems went from being sought after exclusively by the upper classes to becoming a sign of status within reach of millions. “By 1909, the aggregate of average Americans’ spending on diamond rings overtook that by richer citizens,” Press writes.

Observing that the mean amount of an engagement ring purchase fell in this era, a journalist quipped: “He may be earning only $20 a week, but she’s got to have a diamond engagement ring, if the stone’s no more than a quarter of a carat.” A quarter of a carat was where many jewelers started. But the contemporary Sears catalog went further, featuring an entry-level option of a “third quality” one-eighth carat diamond ring, mounted and set, carrying a price of $9.59. Notably, of twenty-eight possible sizes of cut stones in the Sears catalog, twenty-one weighed in at one carat or less. Such stones…were a type in which German Southwest Africa specialized and De Beers lagged.

Dernburg’s success enriched German banks and sent his own political fortunes soaring. In the heyday of the diamond boom, he was hailed as a “captain of industry” and the “Morgan of Germany,” and was considered a likely candidate for chancellor. (The son of a baptized Christian of Jewish ancestry, he also became the target of anti-Semitic slurs in the colony and at home; one overnight diamond tycoon in German Southwest Africa, August Stauch, complained about the “nose of the colonial secretary.”)

The wealth earned from the diamond trade also transformed Lüderitz Bay, described by a South African visitor in 1884 as “a forlorn collection of corrugated iron huts clustering around one or two of the more important buildings, dignified by the names of ‘hotel,’ ‘store,’ and ‘customs house.’” Within months of the 1908 diamond find, the population had nearly quadrupled. Reinforced concrete structures replaced corrugated iron shanties; the town had a weekly newspaper, a streetcar line, a slaughterhouse, an enhanced electrical grid, and a host of ancillary businesses catering to the prospectors who rushed into the territory from all corners of the world. Few amusements existed, however, beyond swimming in the shark-filled bay or drinking oneself into oblivion. “One banker arriving by train at Lüderitz Bay noticed ‘rivers’ of beer bottles lining the tracks,” Press writes. “Other guests blamed ‘capital’ for alcoholic ‘mountains’ strewn across dirty town streets.”

Press gives only passing mention to a dark chapter of colonial history that predated the German diamond boom and set the stage for further horrors. In 1904 Samuel Maharero, paramount chief of the Herero people, organized a rebellion against the occupiers. Angered by years of land thefts and being abused as cheap farm labor, armed Hereros marauded across the sparsely populated countryside, killing 123 colonists, mostly German landowners. For colonial administrators, who had been looking for an excuse to clear out indigenous people from potential gem-producing zones, the Herero uprising came as something of a godsend. General Lothar von Trotha and a force of 15,000 troops surrounded the Herero at the Waterberg Plateau, north of Windhoek, the capital, and massacred thousands with machine guns and artillery. Panicked survivors fled into the desert through an opening in the German lines.

It was then that von Trotha issued his notorious “extermination order,” with the apparent approval of Kaiser Wilhelm II, promising to kill all Hereros who refused to leave the colony. Soldiers of the Schutztruppe—literally “Defense Force,” as the German colonial army in Southwest Africa was called—pursued fleeing Hereros through the near-waterless bush toward the border with Botswana; thousands died of thirst or were shot down in the act of surrendering. The survivors were incarcerated in a concentration camp on Shark Island, a rocky spit just off Lüderitz Bay from which escape was impossible and on which disease was rampant; three thousand Hereros died there, and many of their bodies were tossed into the sea.

The Schutztruppe then turned their attention to the Nama—the swindled chief Josef Frederiks’s people—murdering and imprisoning thousands more. Some historians view this reign of terror as a preamble to the Holocaust; it was perhaps not coincidental that several high-ranking Nazis earned their stripes as ordinary soldiers or officers in the Schutztruppe. (One of the first governors of German Southwest Africa was Heinrich Ernst Göring, the father of Hermann Göring, chief of the Luftwaffe and Hitler’s right-hand man, though the elder Göring returned to Germany long before von Trotha launched his genocidal campaign.)

Dernburg had much in common with the military commanders who had nearly wiped out the troublesome Herero and Nama. “In the process of civilization,” he had once pronounced, “some native tribes, just like some animals, must be destroyed if they are not to degenerate and become encumbrances on the state.” When the diamond rush began in 1908 and Dernburg faced a labor shortage in the thinned-out territory, he imported thousands of workers from Ovamboland, the northernmost region of the colony. (German Southwest Africa had expanded north to the Angola border and east to Botswana after Lüderitz’s death.) Press documents this chapter of German colonial history with damning detail:

Upon arrival in the Forbidden Zone, some Ovambos, deprived of proper lodgings and forced to sleep on sand dunes, froze to death during the cold, windy nights. Often wearing only a breechcloth and kneepads as clothes, Ovambos had to make do with little more than a paper-thin sheet for bedding. Authorities in Lüderitz Bay cruelly denied the new arrivals permission to build fires for warmth. Ordinances also banned the creation of salubrious accommodations for the workers—houses with windows, doors, and wooden floors.

Ovambos toiled in the diamond fields seven days a week in glaring sun and fierce winds, wearing goggles to keep sand from blowing in their eyes, crawling on the scorched earth, and placing gemstones in cans hung around their necks. Fed little but rice and rationed water from brackish wells also used by animals, they contracted scurvy, smallpox, pneumonia, gastroenteritis, and other lethal diseases. Overseers whipped laborers whom they judged not to be working fast enough, administered forced enemas to flush out stones the miners were suspected of swallowing, and gagged them to prevent them from hiding gems in their teeth.

The death toll was staggering. According to one official report cited by Press, 10 percent of the African workers at Kolmanskop, one of the largest diamond fields, died in a single year; another government source reported that during a similar period, 331 out of 2,200 Ovambos perished. Unofficial sources claimed that the mortality rate for African workers in Kolmanskop was 45 percent. Those who died were likely tossed into mass graves on the edge of Lüderitz Bay, near the pits where the Schutztruppe had dumped the corpses of murdered Namas.

Today the old diamond town, located some seven miles from Lüderitz Bay and abandoned in the 1950s with the depletion of the nearby mine, is a tourist attraction: during my visit to Namibia a few years ago while researching a project about the German military campaign against the Herero, I wandered past sand-filled, half-collapsed structures, as well as intact buildings that seemed weirdly frozen in time. These included the Kasino, or recreation center, with a wooden skittles court and an opera stage on which touring German divas performed for lonely mine executives.

The horrors of forbidden zones were not limited to German Southwest Africa. Across the Orange River, De Beers maintained its own Sperrgebiet, a locked-down strip of mining camps along the Diamond Coast north of Cape Town where the company administrators also exercised total control over their workers. “Historians have described these caged settlements-within-settlement…as resembling everything from concentration camps to beehives,” writes the American journalist Matthew Gavin Frank in Flight of the Diamond Smugglers: A Tale of Pigeons, Obsession, and Greed Along Coastal South Africa.

The corporations defended such living conditions, stating that “allowing labourers [to be] free to roam around town encouraged IDB [illicit diamond buying]…. Labourers must be confined to the compounds throughout their contracts.”

Frank became intrigued by this secretive world while on a visit to the Big Hole in Kimberley with his South African–born wife a few years ago. He embarked on a journey through Alexander Bay, Port Nolloth, and other now mostly abandoned settlements, where the diamonds have been largely depleted and the barracks dismantled, but where diggers still engage in furtive and often astonishingly resourceful attempts to augment their meager incomes. In Port Nolloth, he meets a digger who describes

the various ingenious methods employed by those who participate in the thriving and ancillary “industry” of “illicit” diamond smuggling, of which he admitted he was a part. One such method involved the sneaking of trained carrier pigeons onto the mine property, affixing diamonds to the birds, and sending them into the air to fly from the mine to the workers’ homes. When overeager laborers began affixing too many diamonds to the birds, though, the exhausted and overloaded pigeons began to falter, and landed at random along the beaches of the Diamond Coast.

Frank also gets a taste of the ruthlessness with which De Beers meets this challenge to its authority. He joins local militiamen hired by De Beers who track down and seize every pigeon they can find—stealing them from rooftop coops, snatching them from eaves—and shoot them for sport in the dunes outside Port Nolloth. He talks to diggers about De Beers’s alleged violations of child labor laws and the harsh conditions in the diamond fields: “A world of dust, drought, dysentery, and flies, disease and despair, where some dug up a fortune, and others dug their graves.” He chronicles the efforts to protect the company against theft—including forced enemas and random X-rays—and wrangles interviews with defiant De Beers administrators, who denounce diamond smuggling as “a crime against the state.”

Looming large in the imaginations of the diggers is “Mr. Lester,” a De Beers enforcer who may or may not exist. As Frank describes him in a composite drawn from a number of diggers, Mr. Lester is “ten meters tall, breathes fire, has sharp teeth, no eyes, the wings of a raptor, and the ability to infiltrate one’s dreams.” Frank’s quest to meet this elusive figure leads him through a series of ghost towns and ravaged landscapes, the mournful legacy of a company that depleted the earth while leaving little of value behind:

Chimes made of bleached fish jawbones hang from the porch eaves of Kleinzee’s abandoned houses—each of which is low and square and painted white. The wind piles the dust against their walls. No one sits on their stoops, and the only people I see are rail-thin and clad in the same brown gumboots, the same palatinate overalls X’d over the backs with yellow reflective tape, walking not into homes, but down the middle of roads that end at further boom gates, and beyond them, incalculable measures of diamondiferous red sand, and dead birds decomposing in the dunes-cum-tumuli.

The overlords of German Southwest Africa maintained control of the diamond fields for less than a decade. Blamed for a series of ruinous stock bubbles, targeted by anti-Semites and other enemies, and resented for his failure to spread the colony’s wealth beyond the German banks and an elite group of investors, Dernburg resigned as colonial secretary in 1910. (The chapters recounting these political machinations are the densest and most tedious of Press’s book.) Four years later, war broke out. In September two cruisers, four torpedo boats, and twelve transport ships anchored at Lüderitz Bay and discharged a British expeditionary force from South Africa of two thousand soldiers. The Schutztruppe, ill-prepared for an invasion, surrendered in July 1915 after a few minor skirmishes in the desert.

Following the Treaty of Versailles, Ernest Oppenheimer, a German-born immigrant to Great Britain, swooped in on desperately weakened Germany to claim the diamond fields. Oppenheimer had founded the Anglo-American Corporation, a gold-mining concern in Johannesburg, in 1917, with backing from J.P. Morgan, and was seeking to expand into other mining ventures. He met with German businessmen and government officials at The Hague in October 1919 and negotiated a deal that gave him full possession of the Forbidden Zone. Oppenheimer soon parlayed that into the realization of a long-standing ambition: to become head of De Beers.

A century and a half after its founding in Kimberley, De Beers remains the most powerful participant in the diamond industry, though competition from Canada, Australia, Russia, and other producers has brought its global market share down to roughly 30 percent. In addition to its harsh treatment of workers in the diamond fields, its reputation has been tainted by its predatory practices around the world. For nearly six decades the American government banned De Beers from conducting business in the US because of allegations of price fixing, though the company sold its diamonds anyway, through a variety of loopholes and third parties. In 2004 De Beers pleaded guilty to violating antitrust laws and paid a multimillion-dollar fine.

Neither this setback nor its long history of exploitation and abuse in the diamond fields appears to weigh heavily on the consciences of its owners. Frank quotes a letter sent by Nicky and Jonathan Oppenheimer, the grandson and great-grandson, respectively, of Ernest Oppenheimer, to their employees in 2012, apparently intended to bolster their spirits. “You reinforce our brand through the way you think and act every day,” the Oppenheimers wrote.

The diamond’s place in modern—and future—cultures, and the promise it holds for every person who possesses one, acts as an invisible force, pushing us inevitably and irrevocably toward the right side of history.