DBCM to sell Finsch Diamond Mine to Petra Diamonds

An agreement is reached between De Beers Consolidated Mines (DBCM) and Petra Diamonds Limited (“Petra”) for the sale of the Finsch Diamond Mine (“Finsch”) as a going concern. The deal is worth R1.425 billion (approximately US$200 million) payable in cash. Petra has formed an empowerment consortium to acquire the Mine.

The selection of a buyer was through an open and rigorous selection process evaluating prospective bidders on a number of criteria determined by DBCM as critical to ensuring the long-term sustainability of Finsch. A Petra company was so selected, basis Petra’s access to funding, a detailed evaluation of the company’s technical capacity, a proven track record in South Africa, broad-based BEE credentials, and a strong socio-economic focus.

Barend Petersen, Chairman of DBCM said: “Their track record as a hardrock underground diamond miner bodes well for the long-term sustainability of Finsch going forward, and we are confident that this will help ensure continued investment in the town of Lime Acres and the Northern Cape for many years to come. Perhaps most importantly, today’s announcement brings together a significant pool of employee and women’s organizations and local participation that will ensure that a wide range of empowerment groups will benefit form the mine’s future success.”

Phillip Barton, CEO of DBCM said: “The sale of Finsch Mine reflects the continuing evolution of DBCM’s mining portfolio. It will enable us to prioritise capital to invest in growth opportunities that best suit our criteria, and to sustain a strong diamond mining business in South Africa for the future. In this way DBCM is strengthening its commercial future in South Africa whilst helping to meet Government’s aspirations for a diversified and transformed South African diamond industry.”

DBCM will continue to manage Finsch as normal until the sale, which is subject to a number of conditions precedent, including obtaining the necessary approvals from the Competition Tribunal, as well as the successful transfer of DBCM’s new order mining right to Petra.

De Beers has a lot to be proud of at Finsch Mine – a dedicated workforce, a world class safety record and a well managed environmental programme. A new investor will be able to realise the longer term potential of the Mine”, concluded Barend Petersen.