DE BEERS coined the motto ''Diamonds Are Forever'' to sell the precious stone that it has controlled worldwide for a century.
The slogan could well apply to the South African-based mining giant itself.
De Beers has survived wars and world economic depressions, revolutions and political chaos. Market analysts say there is nothing foreseeable that can shatter what is perhaps the world's most secretive and successful cartel.
Its members have cheated on their quotas; new fields have been exploited by competitors; synthetic carbon crystals can be manufactured: These may scratch the surface of the monopoly but cannot completely break it, diamond industry experts say.
De Beers has convinced people worldwide that they need the glittering stones as a precious symbol of love and wealth. By creating an illusion of scarcity - by not flooding the market with the best gems and maintaining strict discipline with most members - De Beers and its marketing arm, the London-based Central Selling Organization (CSO), maintain artificially high prices. The result is that De Beers sells 80 percent of the world's most glamorous commodity and produces about half of gem diamonds by dollar value.
It succeeds where other cartels such as OPEC have failed, partly because it can buy up on the open market huge quantities to keep the supply down and is ruthless with members who cheat.
From the moment diamonds are scooped up in big holes in the ground in mines around the globe to when they are sold in small boxes to an elite circle of clients, De Beers and the CSO try to maintain a delicate balance of supply and demand of both gem- and industrial-quality diamonds.
A multimillion-dollar advertising campaign polishes the myth that diamonds should not be resold but held onto forever. For instance, new markets have been created in the Far East where De Beers single-handedly changed courtship rituals by introducing the tradition of engagement diamonds.
Sophisticated intelligence networks and running the cartel like a club ensure tight control and discipline. ''Right now, there is nothing on the horizon that could shake the system,'' says diamond analyst Barry Sergeant of the Johannesburg stockbroker firm Ed Hern Rudolph.
''They are handling an unusual commodity and have expertise no other producer can possibly compete with. What is becoming clear is that the prophets of doom have made the wrong predictions.''
It is a cartel so strong that American antitrust regulations forbid De Beers executives from visiting the United States.
Market speculation has been rife that cheating by Russia - which has leaked more than $800 million worth of diamonds onto the open market in contravention of its 25 percent quota agreement with De Beers - spells the start of the cartel's collapse. Speculators see as worrying a recent announcement by the CSO to cut by 10 percent the price of small industrial diamonds of the sort that Russia is flooding onto the open market.
But the giant cartel has survived past challenges and it will probably again, analysts say. De Beers lived through a crisis in world demand for diamonds in the 1930s during the Great Depression. It also survived the 1973 oil crisis, which weakened Western economies and shrank consumer demand for luxury items like diamonds.
A setback occurred in 1992, when rebels in Angola seized diamond areas while world retail demand for diamonds was exceptionally weak. Tens of thousands of diggers clawed top-class diamonds from river beds and sold them outside De Beers. The company was forced to buy back an estimated $500 million worth of diamonds leaked out of Angola.
Sales recovered and probably would have reached a record $5.5 billion last year. Instead they dropped to $4.25 billion due to the Russian leakages. Some analysts say the Russians are running down stockpiles of the best gems and that they will be exhausted within a few years. But even if the Russians keep cheating, De Beers knows loyal members like Botswana will simply cut production or increase stockpiles in vaults.
Gary Ralfe, managing director of CSO, said in a telephone interview from London that he couldn't imagine anything shaking CSO dominance. ''It seems we are in a pretty sound position.'' But he added: ''There might be pitfalls lurking.''
One of the biggest challenges ahead would be if an Australian-based mining company, Broken Hill Proprietary (BHP), which does not belong to the CSO, makes a major find in Canada, where some promising prospecting is under way.
But Mr. Ralfe said he was ''fairly relaxed'' about such a possibility because he doubted BHP would flood the diamond market. ''They would not want to disturb the world market,'' he said.
Ralfe said Russia's cheating on its quota had hit market confidence by creating the perception that consensus among cartel members was breaking down. Gross retail sales in 1993 and 1994 were up 2 percent and 5 percent respectively, which should have boosted sales of polished diamonds - but did not.
Ralfe, who is negotiating with Russia to renew a deal that expires in December, expressed the hope that an agreement would be reached and that the Russians would adhere to it. But he added: ''It is a question I ask myself.... How can we ensure that a future contract is not a sham and is really respected by all?''
Meanwhile, what are the challenges ahead, assuming De Beers rides out the Russian crisis as expected?
Most cartel producers, such as diamond companies in Botswana and Namibia, are disciplined about their quotas, realizing that their economies depend on it. Analysts say it is unlikely a giant new source will be discovered outside the cartel, despite promising prospecting in Canada. Retail demand appears to be good, barring a worldwide economic downturn.