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De Beers concludes empowerment deal for Jagersfontein
Enters transaction with Superkolong Consortium
By: Diamond World News Service
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Oct 1 2010 12:10AM
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Reference: 5359  

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De Beers has closed a transaction with Superkolong Consortium which has acquired all of De Beers’ assets (including its mine dumps) at Jagersfontein. De Beers had begun a thorough disposal process of the same in March 2010.

Superkolong is a broad-based BEE holding company for a number of mining operations including alluvial diamond operations. Shareholders include Manyatti Investments and Kolong Investments.

The deal acknowledged and met the criteria set by De Beers including technical, economic, community, technical competence, available funding to develop the new processing operation, BEE equity participation; employment creation and significant community based initiatives in an area where mining ceased almost 40 years ago.

De Beers Acting CEO, Barend Petersen, said, “I am very pleased to say that De Beers, with some determination to do the ‘right thing’, and taking the time necessary to engage with stakeholders affected by our business, has concluded another transaction to introduce miners with empowerment credentials to opportunities which have the potential to deliver significant returns for many. The impact, particularly at local government level, and in the Provinces where economic development is so important to communities near mining resources, cannot be over-stated as development in the rural areas of South Africa can exponentially benefit the economy and therefore society.”

Barend also pointed out to Superkolong’s responsibility as “We hope that this deal will make a meaningful contribution to the community.”

The Jagersfontein Community is to be the sole beneficiary of a soon-to-be established Community Trust. The Community Trust will hold 10 per cent equity ownership in the holding company that has acquired the Company’s assets. The Trust deed will restrict outflows from the Trust to credible community-based initiatives presented by community bodies that demonstrate a sufficient level of internal organisation and governance as managed by the Trustees, who will be drawn from the local community and the new owners. Further, the Trust will, on formation and registration, receive R20 million in cash for investment and, after due process, expenditure on community benefiting projects. The Trust will have a deferred right to an amount of R30 million, which will accrue interest over time and contribute to the future financial position of the Community Trust.

The Superkolong consortium has committed facilitating skills transfer to the members of the community, to ultimately source skilled labour from Jagersfontein. The investment into redeveloping Jagersfontein Mine to process the tailings resource (mine dumps) will promote local economic development. It is envisaged that the transaction will create opportunities for local Free State entrepreneurs as has been the case at De Beers Voorspoed Mine near Kroonstad.

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