Until the beginning of the eighteenth century all known diamonds came from the Golconda region near Hyderabad in India. Pliny wrote an incredible account of how diamonds were found in an inaccessible valley. The locals threw meat into the valley and the diamonds stuck to it. Eagles carried off the meat to their nests from which the diamonds were recovered. At their peak the Golconda diamond fields probably supported many thousands of workers but were practically exhausted by the late seventeenth century.

In 1844 diamonds were discovered in Brazil and for a while the Chapada Diamantina, or Diamond Highlands, in the state of Bahia, became the diamond capital of the world attracting prospectors and adventurers in the same way that the California Gold Rush did. A series of major diamond finds in South Africa from 1867 onwards, coinciding with a decline in production in Brazil, soon made it by far the biggest source of diamonds. As in Brazil and Indian the first finds were alluvial but by 1869 diamonds were being mined in South Africa.

Their value depended on their rarity and Cecil Rhodes realised that if suppliers competed against each other that would be threatened. By the end of his short life Rhodes had gained control of the diamond mines and extended British rule over much of southern Africa. Mark Twain said of him that when he stands upon the Cape of Good Hope, his shadow falls to the Zambesi (Twain, 1904). One area that was not under British rule was South-West Africa (now Namibia), a German colony, and the discovery of diamonds there in 1908 threatened the monopoly of Rhodes' old company, De Beers.

However, South African forces occupied the colony in the First World War, cutting off Germany's main supply of industrial diamonds, and it remained under South African administration until Namibia became independent in 1990. Ernest Oppenheimer, a German Jew with British citizenship resident in South Africa, acquired the German diamond interests which he formed into the Consolidated Diamond Mines which he then offered to De Beers in exchange for that company's stock. He was also given a place on the board and soon emerged as the most dominant figure in industry since Rhodes, whose policy of building and safeguarding a monopoly Oppenheimer continued.