De Beers to sell Cullinan Gem Mine, Kimberley assets

De Beers to sell Cullinan Gem Mine, Kimberley assets
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First Published: Wed, Feb 28 2007. 12 31 AM IST
Updated: Wed, Feb 28 2007. 12 31 AM IST
Johhanesburg: De Beers, the world’s biggest diamond company, said it will “seek offers” for its Cullinan and parts of its Kimberley Underground mines in South Africa.
The company plans to pursue unsolicited approaches for Kimberley Underground from unidentified parties, according to an e-mailed statement received on 27 February. Kimberley Underground was closed in late 2005 while Cullinan produced 1.3 million carats in 2005, De Beers said.
De Beers, 45% owned by Anglo American Plc, has been struggling to make its six South African mines profitable. Two were still losing money at the end of 2006. The South African operations accounted for 29% of De Beers’ total output last year.
De Beers said it is also looking to sell processed rock still containing diamonds near the Kimberley operations.
The company is aiming for greater returns, Managing Director Gareth Penny said in the statement, adding it is no longer only maximizing its share of world production.
Standard Bank Group Ltd, Africa’s largest lender, was appointed as the investment bank and financial adviser to De Beers’ South African unit, De Beers Consolidated Mines, in the transactions.
Three years ago, De Beers put a 7 billion-rand plan to expand Cullinan on hold after the rand strengthened against the dollar. De Beers pays most of its costs in the local currency and earns dollars from its sales.
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First Published: Wed, Feb 28 2007. 12 31 AM IST