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De Beers sold its last mines in Kimberley in 2006 but continued to pull diamonds from the waste rock in the Kimberley plant, which uses X-ray and other modern technology. (Image courtesy of De Beers Consolidated Mines)
Anglo American’s (LON:AAL) De Beers ended Tuesday more than 125 years of diamond mining history in South Africa by selling its last remaining producing assets in Kimberley, the city that was the centre of a 19th century exploration frenzy.
The company, which dominated the diamond industry for more than a century as both miner and trader, said a consortium formed by Petra Diamonds (LON:PDL) and South African firm Ekapa Mining have agreed to pay close to $7.2 million for the mines.
In a separate statement, Petra — which has the historic Finsch and Cullinan mines, also previously owned by De Beers — said it will pay around $3.6m for a 49.9% stake in the mines, while Ekapa will hold the rest.
Petra’s shares soared on the news. They were trading more than 12% higher at 71.87 pence at 3:15 pm GMT.
De Beers, founded in 1888 and now majority-owned by Anglo American, put the Kimberley Mines Tailings, which extracts diamonds from waste from old mines, up for sale in May.
The unit produced 722,000 carats last year, making it De Beers’s second-largest operation in South Africa, but it represents only 2% of the company’s overall production.
De Beers sold its last mines in Kimberley in 2006 but continued to pull diamonds from the waste rock in the Kimberley Mines Tailings, which uses X-ray and other modern technology.
Diamond miners made fortunes in Kimberley, leaving a cratered landscape as evidence of their work, including the “Big Hole”, which is more than 200 metres deep and 450 metres wide and that it was once renowned as the world’s largest hand-dug pit.
2 Comments
Matilija
That amount they are paying is almost nothing. Production must be way down?
http://www.cccarto.com/atlas/diamondmines/southafrica/
Kadesh Barnea
de Beers have already cleared most of the good stuff. But note the price is $, so times 14.4 at the moment. I think it’s a pretty good price for some old tailings that were deemed waste a few decades ago.