De Beers Ready to Accept Offers for Some South African Mines

De Beers said Tuesday that it intends to seek offers for Cullinan Diamond Mine, established in 1903, and Kimberley Underground Mines, established in 1884, as well as a number of residual and dormant diamond tailing resources in and around Kimberley. The move continues De Beers’ drive to position itself for future growth by focusing its resources on those mines that fit the company’s strategy and form part of its long-term future, the diamond mining marketing said in a statement.

This announcement follows an agreement between De Beers and the South African Department of Minerals and Energy to consolidate diamond operations on the country’s West Coast into a single, independent diamond company.

De Beers Consolidated Mines intends to offer Cullinan as a going concern, limiting the need for any change in the number of employees working at the mine. In addition, as the Kimberley underground operations were closed in late 2005 and the tailings resources being offered are not currently utilised by DBCM, the disposals could create new employment opportunities, the company said. DBCM’s Kimberley Mines will continue to process tailings resources through the Combined Treatment Plant for the foreseeable future.

De Beers has appointed Standard Bank to act as investment bank and financial advisor to DBCM for the sales.

“De Beers is on a journey from being the world’s major supplier of diamonds to being the leader of a highly competitive industry,” said Gareth Penny, managing director of the De Beers Group. “As we build the De Beers of the future we are carefully examining our portfolio of mining assets, as our new global business model is no longer based simply on maximising our market share of production. Instead, we’re looking to drive greater returns on capital, and that means we want to focus our resources on mines and exploration activities that will be a part of that vision.”

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