De Beers to invest $1.4 billion in S. Africa mines

De Beers to invest $1.4 billion in S. Africa mines
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First Published: Wed, Feb 21 2007. 11 54 PM IST
Updated: Wed, Feb 21 2007. 11 54 PM IST
De Beers, the world’s biggest diamond company, plans to invest almost 10 billion rand ($1.4 billion) in South Africa over the next five years to expand mines and explore for new gem deposits.
“We’ll spend an average 2 billion rand a year from 2007 mainly in South Africa,” David Noko, managing director of De Beers’s South African business, said in an interview yesterday in Johannesburg. That also includes social spending, he added.
Production at the company’s six South African mines fell 3.9 % to 14.6 million carats last year. Two of the mines were still unprofitable at the end of 2006 after the rand gained against the dollar in the first half of the year, Noko said. The South African operations accounted for 29 % of De Beers’s total output last year.
“We’re not failing to turn around. It’s a journey,” Noko said. The company had targeted making all six mines profitable by the end of 2006 compared with just two in 2004.
There is a “good business case” for merging the company’s unprofitable Namaqualand mine with the operations of state-run Alexkor, which are also losing money, Noko said. Namaqualand has a lot of unused plant and little ground to mine from, whereas Alexkor has the reverse, he added.
Anglo American Plc owns 45 % of De Beers, which mines 40 %of the world’s gems. Shares of Anglo fell 8.49 rand, or 2.4 %, to 351.50 rand in Johannesburg.
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First Published: Wed, Feb 21 2007. 11 54 PM IST