Ernest Oppenheimer was the first of the Oppenheimer family to prosper in the diamond industry. He and his descendants would continue to play an integral role in shaping the industry for more than a century. He was born in 1880 in Freidburg, Germany, the son of a cigar merchant. At the age of 17, he began his working career as a diamond broker in London as diamonds were just becoming widely available with the early South African diamond rush. By 1902, he had impressed his employers so much that they sent him to South Africa to represent them as a diamond buyer in Kimberley.
At the same time, the massive Premier Mine was put into production. Its owner, Thomas Cullinan, had refused to join De Beers Consolidated mining, and instead began selling his production to two independent diamond dealers from London, Oppenheimer and his brother Bernard. This massive production undermined De Beers’ sales, but Francis Oats, the successor to Cecil Rhodes as Chair of De Beers, was dismissive of the threat. However, production from the Premier Mine would soon eclipse the production from all De Beers mines combined. Oppenheimer was appointed as the local agent for the powerful London syndicate, much to the angst of Oats.
His skills as a diamond valuator and prospector earned him international acclaim, and he would soon become known as one of the world’s top diamond experts. When diamonds were first discovered in German South West Africa (modern-day Namibia) in 1910, he travelled there to assess the situation, and provided intelligence briefings to the syndicate on the possible future of mining in the area. When German South West Africa later came under the control of South African troops during World War I, he took control of the confiscated German mining interests in the area, and formed a new company, the Consolidated Diamond Mines of South West Africa. Naturally, these interests would later be joined with De Beers in their efforts to consolidate diamond-mining activity in Africa.
After the end of World War I, the diamond industry would over-produce, leading to a crash in prices that caused many of the Kimberley mines to be shut down. Oppenheimer established the Central Selling Organization (CSO), which effectively incorporated all other diamond producers and sellers into De Beers. The strategy was tested with the onset of the Great Depression, when demand for diamonds fell dramatically around the world. All of the recently re-opened mines were once again closed, and many remained that way for years. Despite the challenges, Oppenheimer’s efforts to restrict supply and consolidate sales proved effective, and the industry would limp back to life by the mid-1930s.
Just before the onset of the war, Oppenheimer befriended William Lincoln Honnold, an American engineer who was acquiring interests in coal, gold, and copper mines in the Transvaal area of South Africa. With £1 million in backing from JP Morgan and other investors, the two established the Anglo-American Corporation in 1917. Oppenheimer initially wanted the company to be named “African-American”. However, his US financial backers refuted the idea, and insisted that the name be changed to Anglo-American. Anglo would make its entrance into diamonds in 1926, buying a majority stake in De Beers. Already a board member, Oppenheimer would be elected as chairman of the company in 1929.
In his early days in South Africa, Oppenheimer married Mary Lina Pollack from London, and the couple had two sons. In the 1930s, he began to transfer responsibility for Anglo and De Beers over to his son Harry, who would later serve as Chairman of both Anglo and De Beers for more than 25 years, and become one of the wealthiest people in the world.
Oppenheimer’s efforts to fix the price of diamonds successfully resurrected the industry, and remained largely in place for decades after his death. He even went as far as to restrict diamond production based on projections of the number of weddings and engagements in Britain and the US. At the time, less than 20% of brides wore a diamond engagement ring, and Oppenheimer saw a huge opportunity to brand diamonds as a symbol of love and commitment. In 1939, he sent his son Harry to New York to search out marketing opportunities for diamonds in the United States. This would eventually lead to De Beers’ immortal slogan, ‘A Diamond is Forever’.
While his efforts to fix prices and production of diamonds were successful for De Beers, they began to catch the eye of regulators in the United States, who later accused De Beers of antitrust behavior. The US government had asked that De Beers provide them with industrial diamonds during World War II as part of the war effort. Oppenheimer attempted to negotiate his way around the US Sherman Antitrust Act by incorporating a branch of the CSO in the United States, and offering the US government a supply of the industrial diamonds they needed so desperately. Once the US Justice Department concluded that De Beers had no real intention of fulfilling its commitment to supply the stones, they were found in breach of the act, and formal antitrust allegations were brought against the company in 1945. Those charges were dismissed, however, since the company had no business presence on US soil. That would begin a long period in which the company could not even send its executives into its largest market for fear of arrest.
While Oppenheimer would become a huge success in business, he was always very active in local politics in South Africa, first elected to the Kimberley town council in 1908, and was later made mayor of Kimberley in 1912. Despite his German heritage, he was instrumental in the war effort on behalf of the allied forces at the onset of World War I. He helped to establish the Kimberley regiment, and organized the labor needed to build a supply railway from Upington in the Northern Cape to the Namibian border. The British Crown conferred a knighthood on him in 1921 for his efforts. However, his German surname would not go unnoticed in the region, and his home was once stoned in 1916 at the height of the war. Oppenheimer was born into a Jewish family, but converted to Anglicanism as an adult.
In 1924, as a member of the South African Party under Jan Smuts, he represented Kimberley in the national parliament. At the time, issues of race relations were the dominant focus of legislative efforts. Oppenheimer often steered clear of these debates, instead focusing more on financial and economic concerns. He was regarded by some as a progressive leader, who was the first to provide adequate housing for black workers and their families within Anglo’s mining operations.
Oppenheimer was deputy chair of the Rhokana Corporation, and served on the commissions that led to the creation of the South African Reserve Bank. He served as a director of Barclay's Bank and the British South Africa Company. During the Second World War, he helped establish diamond-cutting factories in South Africa to replace the ones in Europe.
Oppenheimer died in 1957, and is buried at St. George’s Church in Parktown, a suburb of Johannesburg. His son Harry succeeded him as Chairman of De Beers.