Mmegi Online
Thursday, 11 September 2008
Vol. 25, No. 135
De Beers offloads another mine to Petra
STAFF WRITER
DIAMOND miner Petra Diamonds has agreed to buy 75 percent of Tanzania's Williamson Mine for US$10 million from the De Beers Group and has budgeted US$28 million to expand the operation in the next two years.
This is the fourth mine Petra Diamonds has bought from De Beers since buying Cullinan, Kimberley Underground and Koffiefontein. As a smaller outfit, Petra Diamonds can mine and manage ageing deposits more economically.
De Beers has opened two new mines in Canada and one in South Africa.
The Managing Director of the De Beers Gareth Penny explained: "The sale of our shareholding in Williamson Diamonds is part of our on-going drive to position De Beers for long-term growth by reviewing our portfolio of mining assets and focusing on those with the best strategic fit.
"As we build the De Beers of the future, we are also creating new opportunities for other players in an increasingly diversified and competitive global diamond industry."
In terms of the sale agreement, the cash consideration is US$10 million. The transaction will also transfer rehabilitation liability.Said Johan Dippenaar, the Chief Executive Officer of Petra:
"Petra already owns three of the world's major diamond mines, Cullinan, Koffiefontein and on completion, Kimberley Underground.
Williamson will add a fourth world-class mine to our portfolio, with the potential to deliver considerable value to our shareholders.
"This acquisition also marks Petra's entry into Tanzania, further diversifying the company's geographical spread across Africa. We thank the Government of the United Republic of Tanzania for their support in completing this transaction, and we look forward to working with the Government as our partner in taking the mine forward."
The proposed transaction bodes well for the future of Williamson Diamond Mine as it gives Petra the opportunity to use its expertise to unlock the significant value at the Mwadui deposit (the world's largest kimberlite mine currently in production at 146 hectares) and to invest for the continued sustainable development of mining operations at the Williamson Diamond Mine and the communities the mine supports.
"The Government of the United Republic of Tanzania is pleased to welcome Petra to Tanzania as its new partner in Williamson Diamonds Limited," said Tanzania's Minister of Energy and Minerals, William Ngeleja, when commenting on the sale.
"This is an exciting opportunity to breathe new life into Williamson Mine and Tanzania's diamond mining sector."
Since 1958, Williamson Diamond Limited (WDL) has operated as an incorporated joint-venture between the Government of Tanzania and De Beers. De Beers' shareholding in WDL is held through its wholly-owned subsidiary, Willcroft Company Limited.
WDL operates the open-pit Williamson Mine at Mwadui in the Shinyanga region of northern Tanzania. Petra views itself as a committed long-term player in the diamond industry and has shown itself to be a responsible miner and a good corporate citizen.
The company has proven diamond-mining expertise and, in recent years, has acquired a number of other mines from De Beers Consolidated Mines, a South African subsidiary of De Beers.