Billionaire Wiese sees opportunity to combine diamond mines

JOHANNESBURG: Christo Wiese (pictured), South Africa’s richest man, sees opportunities to consolidate diamond operations in the region after buying a stake in a Cape Townbased miner of the precious stones.

Wiese, 74, has always been “fascinated’’ by diamonds and saw good value in Trans Hex Group Ltd, he said in an interview in Cape Town last week. “There are opportunities for consolidating diamond operations in southern Africa,’’ he said. “Obviously we will look at growing the business as much as we can.’’

Two companies backed by Wiese’s family bought a 47 per cent stake in the gem producer and planned to form a group with 25 per cent shareholder RECM & Calibre Ltd, Piet Viljoen, a director of RECM, said on August 8. Trans Hex’s market value is 414 million rand ($31 million).

It’s been a difficult 12 months for diamond producers after prices fell 18 per cent last year, the most since the financial crisis of 2008, as Chinese demand slowed and an industrywide credit crunch hit buyers who cut, polish and manufacture the stones. That’s creating openings for investors such as Wiese, who are willing to take a punt on luxury gems.

While Wiese is best known for his retail successes including clothing chain Pepkor, which was sold to Steinhoff International Holdings NV for $5.7 billion in 2014, Trans Hex isn’t his first foray into diamond mining, tracing back to co-ownership of a South African alluvial diamond mine in the 1970s. He is worth $7.6 billion, according to Bloomberg Billionaires index.

Diamonds are “wonderful things, things of beauty and of everlasting value,’’ Wiese said.

“It’s just a very exciting business,” he added. — Bloomberg