Wiese returns to diamond hunt
Revived passion for mining ‘may be riskier than any of the bets he’s made in retail’. BACK TO THE FUTURE: BILLIONAIRE SAYS HIS BUSINESS HAS TURNED UP A R198M PINK STONE
Christo Wiese, South Africa’s billionaire retail king, is going back to the future. The 82-year-old serial investor, who steered the expansion of both Africa’s biggest clothing retailer and the continent’s largest grocer, has dived into something that harkens back to the start of his storied career nearly half a century ago: diamonds.
“I’ve always been fascinated by diamonds because it’s that amazing industry where you plod along and then one day stumble on a big stone that can change your whole life,” Wiese said over lunch at the summer-green vineyards of Beau Constantia, a wine farm in Cape Town. “This stretch of the Atlantic Ocean produces some of the world’s highest-quality diamonds.”
The theory goes that the more than 2.5-billion-year-old Kaapvaal Craton and shifting continental plates transported diamond-bearing detritus down SA’s Orange River to the south-western coast of the continent. It is here that Wiese dreams of finding a “big one”, leading the self-made tycoon over the last few years to spend at least some of his eight-hour workdays on his mining business, which he says has already turned up a $10 million (about R193 million) pink diamond.
Trans Hex Group, the mining unit Wiese owns with his son-inlaw, plans over time to hunt for other sought-after minerals and metals like phosphate, lithium, gold and platinum.
It has four large ships fitted with equipment that can look for these treasures by vacuuming up gravel from the ocean floor that’s processed on board before the tailings are tossed back into the sea. A state-of-the-art diamond recovery vessel can cost as much as $420 million.
The magnate, whose net worth is $1.2 billion, according to the Bloomberg Billionaires Index – down from $7 billion after he lost a sizable chunk of his fortune with the 2017 implosion of the furniture stores chain Steinhoff International Holdings NV – knows what he’s venturing into.
Wiese first got into alluvial diin 1976 when he bought a mine along the Orange River. It was the country’s biggest behind those held by Anglo American-owned De Beers, the world’s top diamond producer, which also mines along Namibian waters.
It was “a very exciting proposition”, Wiese said of his first enterprise. He sold it about five years later because he wanted funds to buy control of the clothing chain Pepkor, which became his biggest asset.
Industry observers say Wiese’s revived passion for diamond mining may be riskier than any of the bets he’s made in the retail sector, and that it shows he has not lost his appetite for adventure even after being badly burned by his investment in Steinhoff. “South African mining is made up of pioneers, but this type of mining is not easy and gives patchy profits at best,” said David Shapiro, who has 52 years of JSE experience and is chief global equity strategist at Sasfin Securities. “He’s got enough money to do what he needs to do, so perhaps he’s willing to dabble in riskier ventures.” Born the son of a sheep and cattle farmer in the remote, deamonds sert-like northern city of Upington, Wiese obtained a law degree from Stellenbosch University in 1967, after which he joined Pep – founded two years earlier with a single store in a rural railway town. He left the business briefly to practice law, and unsuccessfully stood for parliament for the Progressive Federal Party.
Turning his focus back to Pep, he became the biggest shareholder and chair of the company in 1981, renamed it Pepkor, and helped oversee an aggressive expansion drive.
Pepkor bought retail chains Smart Group Holdings, Cashbuild, Checkers and Stuttafords in 1991 and made its first offshore foray that year, opening a Your More Store outlet in Scotland.
Wiese spent three and a half decades building Pepkor into a formidable business with operations across Africa and Europe, and spun off and expanded Shoprite Holdings to become the continent’s biggest grocer. Shoprite remains his star investment.
In 2014, he exchanged his $2.5 billion Pepkor stake for stock in Steinhoff. Three years later, auditors refused to sign off on Steinhoff’s accounts after uncovering financial irregularities, and its share price tumbled by about 90%. It later emerged that its management had vastly inflated profits. Wiese denied any knowledge of the malfeasance.
Even with an established family office, Wiese says he has no plans to retire.
“Many people think I’m crazy to still come and sit in the office every day,” he said. “But I think, while you’re alive, be active, be part of life. And I enjoy it, even when we sit here sometimes really struggling with challenges.”
Many people think I’m crazy to still come and sit in the office every day