Cecil Rhodes Establishes De Beers Consolidated Mines: 1888

Citation metadata

Editor: Jennifer Stock
Date: 2014
Publisher: Gale, a Cengage Company
Document Type: Topic overview; Event overview
Length: 1,905 words
Content Level: (Level 5)
Lexile Measure: 1310L

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Key Facts

Global Context

Africa

In 1888 Mwanga II (1868–1903) is deposed as ruler of Buganda in present-day Uganda.

Asia and Oceania

Great Britain establishes protectorates over Sarawak and North Borneo, both located in present-day Malaysia, in 1888.

Central and South America

In 1888 Brazil becomes the last country in the Western world to abolish slavery.

Europe

The last German monarch, Wilhelm II (1859–1941), takes the throne in 1888.

Middle East

In 1888 most major world powers except Great Britain sign the Convention of Constantinople, agreeing to keep the Suez Canal open to all nations.

North America

In 1888 Benjamin Harrison (1833–1901) is elected the twenty-third president of the United States.

Key Figures

Business Leaders

Cecil Rhodes (1853–1902), British-born South African entrepreneur.

Charles Darnell Rudd (1844–1916), British entrepreneur.

Political Leaders

Lobengula (c. 1836–1894), king of Ndebele.

Background

The first diamond discovered by Europeans in southern Africa was the Eureka Diamond. It was found near Hopetown on the Orange River in 1867. Two years later the Star of South Africa (also called the Dudley Diamond) was discovered in the same vicinity, on the banks of the Vaal River. The discovery of these and other diamonds led to a diamond rush. By the end of 1869, several hundred people had made their way to the Vaal River, prospecting for diamonds. Among them were Boers (descendants of Dutch settlers in present-day South Africa) and British, as wells as Americans, Australians, Germans, Russians, and Africans. In 1870 that number had swelled to ten thousand prospectors stretched out over eighty miles of the river. Meanwhile, another large diamond was found in 1869 on the hillock Colesberg Kopje, in the present-day South African province of Northern Cape. Within a month, several thousand men were digging on the hill to find more diamonds, which led to the creation of the Kimberley Mine.

The diamond rush attracted the attention of the young Englishman Cecil John Rhodes (1853–1902). Rhodes was one of nine sons born to a British vicar of modest means, and he was educated in the local grammar school. However, he suffered from ill health as a teenager and, at the age of seventeen, was sent to present-day South Africa in hopes of improving it.

When Rhodes arrived in October 1870, he first focused on growing cotton with his brother, Herbert, in Natal. However, the lure of the diamond fields proved to be too strong. The diamond mining rush had begun in an area that was soon annexed by Great Britain and incorporated into the Cape Colony. In 1871 Rhodes left Natal and moved to the newly founded city of Kimberley, which supported the diamond mines. There he began as a speculative digger, but then he began speculating in diamond claims and introducing new pumping techniques. Diamonds profoundly changed the political economy of the region and by 1875 were the largest export of the Cape Colony.

Although Rhodes had burgeoning business interests in southern Africa, he returned to England to attend Oxford University intermittently beginning in 1873. By this time, he had gained enough capital to support his education. In 1881 he earned his bachelor of arts degree from that institution. But Rhodes’s primary focus was on building his fortune.

Before completing his degree, in 1880, Rhodes and Charles Darnell Rudd (1844–1916) cofounded the De Beers Mining Company. This company, located in the Cape Colony, was focused on amalgamating mine claims, which was considered key to continued profitability of the mines. Consolidation was important, because it solved many of the major problems of diamond production and marketing as that process grew more complex and labor intensive. For example, as mines extended deeper into the earth, more machinery and technical expertise were needed to support walls and bring diamonds to the surface. In terms of marketing, so many diamonds were being produced by the Kimberley mines that it was necessary to limit how many reached the market for a profit to be turned from sales. By 1882 legislation had been passed that controlled illegal diamond buying, and important innovations were introduced, including the concept of a closed compound so that mining companies could closely monitor their workers.

The Event

Rhodes was not the only emerging diamond baron in South Africa. British entrepreneur Barney Barnato (1851–1897) also held many diamond interests, and Rhodes successfully took control of them. In 1888 Rhodes established De Beers Consolidated Mines by merging his companies with those of Barnato and others whom he had bought out. De Beers Consolidated Mines had a trust deed that included the power to acquire lands, rule over them, and extend the British Empire. It was not Rhodes’s only new business venture in this time period. He and his brother, Frank (1850–1905), formed Goldfields of South Africa, which controlled a number of mines in the Transvaal, a region in northeastern South Africa situated between the Limpopo and Vaal rivers and home to a Boer republic called the South African Republic (also known as the Transvaal Republic).

By the end of the 1880s, Rhodes’s companies controlled the diamond mines in southern Africa and about 90 percent of the diamond production worldwide. Although he was successful in dominating the diamond trade, he was unable to capitalize on the gold rush in southern Africa in the same way. In the late 1880s, prospectors located the largest gold deposit in the world on the Witwatersrand (sometimes known as the Rand), a reef in the Transvaal region, and the city of Johannesburg was established above the mine. Many capitalists, British and otherwise, from Kimberley invested in the growing gold operations in the Rand, but Rhodes invested late and secured relatively inferior claims. Because of this failure, he began focusing more on mineral rights acquisition outside the colonial area as well as politics.

Agents acting on Rhodes’s behalf secured the so-called Rudd Concession from Lobengula (c. 1836–1894), king of the Ndebele in Matabeleland, the country to the north of the Transvaal region, to exploit all the mines in his domain. King Lobengula strenuously disavowed the written version, but the concession allowed Rhodes to obtain a royal charter to create his British South Africa Company (BSAC) in 1889. The charter gave him the ability to sell shares for the enterprise to both settle and mine present-day Zambia and Zimbabwe. BSAC also extended administrative control over much of south-central and southern Africa, gaining much land and mineral concessions in present-day Malawi and Zambia. However, the areas BSAC tried to develop did not turn into the desired gold mining operation similar in quantity to the Rand. This situation eventually led to war with, and quick defeat of, the Ndebele in 1893.

Politically, Rhodes had been active since 1880, when he was first elected to the Cape Parliament. As a member of Parliament and, after 1883, a cabinet member, he played an important role in ensuring the British annexed the Tswana kingdoms to the north of the Cape Colony. He also created such concern about South African Republic and German expansion that the British took control of Bechuanaland in 1885. In 1890 Rhodes became prime minister of the Cape Colony, and he focused on a goal of creating a South African federation under the British flag. As prime minister, he ensured that laws were passed to appease Boers by limiting the vote of Africans by educational and property qualifications in 1892 and establishing a new system of native administration in 1894 via the Glen Grey Act of 1894, which further limited the rights of Africans. The law ensured that Africans’ access to land was restricted, forced Africans into the labor market, and reduced the voting strength of Africans.

By 1895 Rhodes’s failing health and his desire to push forward his goal of a South African federation led to some strategic errors. Rhodes organized a conspiracy with others to remove the Boer government in the South African Republic so that a more British imperialist and mining-friendly one could be installed in its place. To this end, in late 1895 an armed force led by a BSAC agent and aide to Rhodes, Leander Starr Jameson (1853–1917), launched an ill-fated invasion from the north into the area. When the expedition failed, Rhodes was compelled to resign as prime minister in January 1896 as well as from the board of BSAC.

The tensions created as the result of the failed invasion eventually led to the outbreak of war between Britain and the Boer republics, the South African Republic and the Orange Free State. British victory in the South African War (also known as the Second Boer War; 1899–1902) led to the uniting and formation of South Africa within the British Empire. In this same general period, BSAC put in place oppressive policies toward Africans in Rhodesia, the country that was named after Cecil Rhodes, which led to widespread uprisings between 1896 and 1897. Many Africans lost their lives in the process.

After his resignation, Rhodes moved to Rhodesia, where he focused on developing the colony, imposing colonial authority, and advancing the interests of settlers. He also put forward another imperialist vision for Africa that included extending a railway and creating a transportation network that would stretch from the Cape to Cairo, Egypt. Many were dismissive of his grandiose idea.

When the South African War broke out in October 1899, Rhodes quickly returned to Kimberley, which the Boers surrounded a few days after his arrival. As the siege of Kimberley continued, he helped organize the city’s defense and its sanitation efforts, though his health worsened. After the war’s end, he went to Europe before returning to the Cape. He died in Muizenberg, Cape Town, in March 1902.

Global Effect

For many historians, Rhodes embodied the greedy capitalist and imperialist forces that ravaged much of Africa in the late nineteenth and early twentieth centuries. Even before he had acquired his massive fortune, Rhodes demonstrated this attitude in his first will, created in 1877 after he had a major heart attack. He wanted his future fortune to be used to establish a secret society that would extend British rule worldwide and colonize it with British settlers.

Because of this perception of him, it is not surprising that many historians regard Rhodes as the embodiment of monopoly capitalism, migrant labor, and colonialism. Rhodes was seen as a schemer who was obsessed not only with business but also with asserting influence over southern Africa affairs. For him, personal gain was inseparable from imperial mission. The rhetoric and actions of Rhodes made him one of the most powerful white men in southern Africa in the late nineteenth century. He helped to form and influence regimes that exploited resources, controlled major amounts of land, and implemented racist regimentations of labor that came to define white rule in southern Africa until nearly the end of the twentieth century.

Although many historians believe that Rhodes exemplifies British imperialism, the bulk of his fortune was used to endow the well-known Rhodes Scholarship, which provides funding and admittance for students from the British colonies, the United States, and Germany desiring to attend Oxford University. Initially, the scholarships were intended for white male students only and were intended to create imperial leaders not unlike Rhodes himself. Rhodes also bequeathed land that was eventually used to build a university in Rhodesia. (The country was renamed Zimbabwe after gaining independence from Britain in 1980.)

Rhodes’s business legacy remained impressive more than a century after his death. Even at the end of the twentieth century and beginning of the twenty-first, De Beers remained the biggest miner and seller of diamonds in the world. It also controlled the world market in diamonds.

Source Citation

Source Citation   (MLA 8th Edition)
"Cecil Rhodes Establishes De Beers Consolidated Mines: 1888." Global Events: Milestone Events Throughout History, edited by Jennifer Stock, vol. 1: Africa, Gale, 2014. Gale In Context: World History, https%3A%2F%2Flink.gale.com%2Fapps%2Fdoc%2FYKKYHC533022785%2FWHIC%3Fu%3Dazpcld%26sid%3DWHIC%26xid%3D26168254. Accessed 23 Sept. 2019.

Gale Document Number: GALE|YKKYHC533022785