De Beers seeks to sell Kimberley Mines tailings

DE BEERS Consolidated Mines (DBCM) is looking for a buyer for its loss-making Kimberley Mines tailings operation. The operation employs 650 people, including 350 permanent employees.

DBCM operates Kimberley Mines tailings and holds a mining right for Kimberley Mines that expires in 2040. The company is 26 percent owned by Ponahalo Holdings and 74 percent owned by De Beers, the world’s largest producer of rough diamonds by volume.

The tailings operation contributed about 722 000 carats last year to production at De Beers, a company that Anglo American controls, and has been an important source of diamonds since 1978.

De Beers said yesterday that Kimberley Mines could not exploit the resource profitably and the operation no longer fitted into De Beers’ strategy of operating large, long-life and low-cost assets.

DBCM chief executive, Philip Barton said the operation might not have to close in the near future.

“Instead of closing operation in 2018, we the will ensure the assets get the right buyer with proper credentials to sustain economic growth in Kimberley.”

Diamonds were first discovered in South Africa in 1866 along the banks of the Orange River. Asked if a South African buyer would be preferred, Barton said: “The net is wide open. The key is to get a company with strong empowerment credentials.”

Feedback

Barton said De Beers had consulted with Mineral Resources Minister Ngoako Ramatlhodi, Northern Cape Premier Sylvia Lucas and National Union of Mineworkers general secretary Frans Baleni.

“The feedback is to ensure the financial viability of the mine and that the right empowerment group with a good social standing in the industry is awarded with the tender. Their concern is to protect jobs and sustain the economy of the area,” Barton said.

A tender for the company is out and prospective buyers have until next Friday to submit expression of interest.

Underground Kimberley Mines operations were closed in 2005 and sold to Petra Diamonds in 2010. Under Petra management, jobs were created and local suppliers boosted.

De Beers has also sold its mines Wesselton, Bultfontein and Dutoitspan to Petra Diamonds. The group had reduced the price of rough diamonds by 3 percent after buyers rejected the stones in March, it was reported last week.