De Beers Looking to Sell Some of its SA Mining Operations
February 27, 07
De Beers, the world’s leading diamond mining and marketing company today announced that it intends to seek offers for Cullinan Diamond Mine and Kimberley Underground Mines, as well as a number of residual and dormant diamond tailing resources in and around Kimberley.
The move continues De Beers’ drive to position itself for future growth by focusing its resources on those mines that fit the company’s strategy and form part of its long-term future, the company said.
De Beers was already approached about a possible purchase of Kimberley. The company said it intends to pursue these approaches.
De Beers Consolidated Mines (DBCM) intends to offer Cullinan as a going concern, limiting the need for any change in the number of employees working at the mine. In addition, as the Kimberley underground operations were closed in late 2005 and the tailings resources being offered are not currently utilized by DBCM, the disposals could create new employment opportunities. DBCM’s Kimberley Mines will continue to process tailings resources through the Combined Treatment Plant (CTP) well into the future.
De Beers has appointed Standard Bank to act as investment bank and financial advisor to DBCM with respect to the proposed disposals of Cullinan Diamond Mine, Kimberley Underground Mines, and the Kimberley Tailing Mineral Resources.
Gareth Penny, Managing Director of the De Beers Group said, “De Beers is on a journey from being the world’s major supplier of diamonds to being the leader of a highly competitive industry. As we build the De Beers of the future, we are carefully examining our portfolio of mining assets, as our new global business model is no longer based simply on maximizing our market share of production. Instead, we’re looking to drive greater returns on capital, and that means we want to focus our resources on mines and exploration activities that will be a part of that vision.”
The company, through DBCM, intends to invest in South Africa’s diamond mining business. Two such projects are the SASA (South African Sea Areas) Project and Voorspoed Mine, expected to be operational in 2007 and 2008 respectively. Other investments include new exploration activities.