De Beers considering offers for Finsch and Namaqualand diamond mines

We publish courtesy of Mineweb

De Beers has announced that it is considering offers for its Finsch diamond mine and its currently-suspended Namaqualand alluvial operation.

Author: Lawrence Williams

LONDON – The world’s top diamond miner, De Beers, is considering the sale of two more of its older properties – Namaqualand Mines and Finsch Mine in the Northern Cape. Expressions of interest in their purchase has come from third parties on the back of the continuing recovery in the diamond market.

To assess these expressions of interest appropriately, De Beers says it will undertake a systematic review process that will include evaluating the offers received from companies with good mining track records, and strong empowerment credentials. In addition interested parties will have to satisfy many other economic, social and environmental criteria when formulating their submissions.

The Acting CEO of De Beers Consolidated Mines (DBCM), Barend Petersen stated; “We have had approaches from companies interested in discussing the future of Namaqualand Mines and Finsch Mine in the Northern Cape. De Beers has decided to invite separate expressions of interest in each mine through a select tender process.”

De Beers has disposed of several significant older or inactive operations in the past few years – perhaps the most famous of which is the Cullinan (Premier) diamond mine which was sold to a consortium led by Petra Diamonds in 2007.  The Cullinan mine was so renamed in 2003 to celebrate its centenary and was, of course the source of one of the world’s most famous diamonds, the largest rough gem-quality diamond ever found, at 3,106.75 carats and from which two cut diamonds, the Cullinan 1 and Cullinan 2 are some of the biggest attractions in the U.K.’s Crown Jewels.

While De Beers has not said which companies have approached it, the favourite guess is probably Petra which has bought five former De Beers diamond mines in past few years, including the Cullinan noted above, Koffiefontein, the underground operations at Kimberley – all in South Africa and the big Williamson diamond mine in Tanzania.  Another mid-tier diamond miner, Gem Diamonds, with operations in Lesotho (Letseng la Terai), Australia (Ellendale), Indonesia (Cempaka) and with a developing project at Gope in Botswana as well as diamond exploration elsewhere, may also be another possible suitor.

It is expected that the process will take a number of months to reach a conclusion – extending at least well into 2011.  Production at Finsch will continue as planned, while economic development and environmental rehabilitation projects will continue at Namaqualand Mines where production was temporarily suspended in April 2010.

Barend Petersen concluded: “Should  attractive offers be forthcoming the introduction of a new investor at Finsch, with its significant underground resources, and at Namaqualand, with its alluvial reserves, will impact positively on the Northern Cape and extend the life of the mines into the next decade at least. “

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