The longest running and probably the most successfull cartel in the modern world is the international diamond cartel headed by De Beers of South Africa. The cartel system underpinning the $64 billion a year industry is, according to The Economist"curious and anomalous-no other market exists, nor would any thing similar be tolerated in a serious industry while De Beers successfully managed this cartel throughout the 20th century, it is now confronting major chal- lenges in the 21st How did the cartel start? century. What are its driving forces? What are its current chal lenges? This case a these questions.