One of Lev Leviev’s newest philanthropic ventures is the $1 million he invested this winter to expand the Birthright Israel program to the former Soviet Union.
The program provides free trips to Israel for young Jews who have never before visited the country.
When he was growing up in Tashkent, Uzbekistan, Leviev certainly never enjoyed anything like a free trip to Israel. In fact, the family’s aliyah proved ruinously expensive.
Though Leviev rarely speaks to reporters about his personal life — indeed, he rarely speaks to them at all — his assistants recount inconveniences and humiliations that Leviev suffered as a religious Jew growing up in a Muslim society in an officially atheist state.
The Leviev family made aliyah in 1972, when Leviev was 15. His father, Avner, decided to convert the family’s assets into diamonds, which he thought would be easier to transport to Israel. Only when the family arrived in Israel did it become apparent that Avner Leviev actually had bought worthless pieces of glass.
To help support the family, Leviev was sent to work sweeping the floors of a diamond polishing workshop in Ramat Gan. He reportedly was appalled by the quantity of diamond dust left behind by the inefficient polishing process, which cut deeply into the business’ profits, according to an investigative report in the Israeli business magazine The Marker.
Several years later, while still in the army, Leviev developed an innovative method that drastically reduced waste from the polishing process.
After finishing his military service, he opened his own polishing workshop with a single employee — and achieved markedly better profit margins that earned him a reputation in the industry.
Leviev steadily grew his business, establishing himself as an innovator in other ways as well.
First he heralded the move to smaller, less valuable stones, where his polishing technique could effect the greatest savings. Later, he challenged the giant De Beers company in a series of complex deals, that combined with brilliant political maneuvering, that gave Leviev control of diamond mines in Angola and Namibia — and lucrative contracts for his diamond polishing plants in Russia, Armenia, Ukraine, India, China and South Africa.
A case study of Leviev’s complex maneuvering is the concession he received in February 2000 to be the exclusive marketer of Angola’s rough diamonds. Given Angola’s prior agreements with De Beers, news of the contract sent shock waves through the diamond world.
In his characteristically laconic style, Leviev has said that he was “simply invited” by the Angolan government to present a proposal. According to The Marker — whose account was confirmed by a top Leviev aide — the reality is anything but simple, and shows Leviev’s ability to think several steps ahead of his competitors, like a master chess player.
Long before the deal came about, Leviev loaned the Russian government $60 million to expand its operations in Angola, receiving in return an interest — along with operational and financial control — in the Katoka mine.
Then Angola’s finance minister visited Moscow. Russian officials reminded him of Angola’s $4 billion debt from the Soviet era — but hinted that it might help if Russia were allowed to expand its interests in Angolan mines.
Soon, Angola announced its deal with Leviev. Later in the year, Russia announced that a “creative solution” appeared to have been found to Angola’s debt, citing the “excellent ties” between Alrosa, the company that manages Russia’s diamond trade, and Ascorp, the partnership Leviev formed with the Angolan government to market the country’s diamonds.
It’s an excellent tie for Leviev as well, expected to bring him up to $1 billion annually. Suddenly, he has said, he understood a phrase his grandfather would use when the young Leviev would ask for pocket money.
“What, do you think I have a diamond mine?” the old man would answer.
Once he bought his first mine, Leviev has said, the millions began to flow — even though it required less work on his part.
For Angola, as The Marker noted, the deal seemed “strange, not to say suicidal.” But thanks to a plan Leviev devised to license Angolan diamond producers — to weed out sellers of illegal “blood diamonds” whose proceeds finance rebel movements — Angola has cut down on fraud and brought in an extra $100 million a year in revenue.
Leviev’s innovations have applied to other areas of the industry as well, as he opened jewelry stores that can sell his diamonds to the consumer. According to the Toronto Globe and Mail, that makes Leviev the first diamond dealer in the world who also is a mine owner, manufacturer and marketer — maximizing his profit at each stage.
According to The Marker, after less than two decades in the industry Leviev has become the largest private diamond dealer in the world, controlling, directly or indirectly, one-fifth of all the raw diamonds on the planet. Annual turnover at his Leviev Group is estimated at some $1.5 billion.
Leviev also has branched out into other industries, including magnesium and uranium. In addition, he bought a controlling interest in Africa-Israel Investments, a real estate and construction conglomerate with assets and holdings in oil, gas, telecommunications and hotels that are valued at more than $1 billion.
Africa-Israel brought the normally reclusive Leviev his first media attention in Israel in 1997, when he built a huge shopping mall in Ramat Aviv, the very symbol of secular Israel — and then ordered it closed on Shabbat.
The issue inflamed the antagonism between religious and secular in Israel, and threatened to make Leviev, then a relative unknown in Israel, the scourge of Israel’s secular majority. Leviev stuck to his guns, however, refusing to budge on his condition. Now, according to recent reports in the Israeli media, even the mall’s secular neighbors are thankful for the weekend quiet.
The Archive of the Jewish Telegraphic Agency includes articles published from 1923 to 2008. Archive stories reflect the journalistic standards and practices of the time they were published.
