Nicky Oppenheimer 
Archival

Making Diamond South Africa's Best Friend

De Beers Finalizes Black Economic Empowerment Transaction...

administrator

In a joint announcement dated November 7, 2005 by De Beers Société Anonyme and Ponahalo Investment Holdings (Proprietary) Limited, the De Beers Société Anonyme and Ponahalo Investment Holdings Limited have endorsed a groundbreaking, broad based Black Economic Empowerment Transaction with respect to De Beers Consolidated Mines Limited.

  • The creation of Ponahalo, a new generation black empowerment company
  • The immediate sale to Ponahalo of a 26% equity interest in DBCM for approximately R3.8 billion
  • A truly broad based and innovative transaction. Ownership of Ponahalo will be:
    - 50% by De Beers South African based employees and pensioners
    - 50% by a consortium of business and broad based groupings
    - 90% by Historically Disadvantaged South Africans
    - 73% broad based
    - 29% by women
  • Ponahalo's Chairman will be appointed Deputy Chairman of DBCM and serve on DBCM's Executive Committee. Two other Ponahalo nominees will be appointed to DBCM's Board of Directors
  • De Beers' empowerment partners will assist in driving transformation throughout DBCM and provide key, value adding input into the management and strategic direction of DBCM
  • Ponahalo will utilize R10 million (escalating at 5% per annum) of its dividend income each year, or more than R100 million in aggregate over the first 10 years, to make other investments in South Africa
  • Ponahalo will also set aside R5 million each year, or R50 million in aggregate over the first 10 years, which will flow directly through to trusts for the benefit of disadvantaged women, people with disabilities and communities around DBCM's mines
  • Over the first ten years, the balance of Ponahalo's dividend income will be used for debt service
  • De Beers will provide meaningful financial facilitation to ensure a robust and sustainable transaction
  • A transaction that ensures diamonds continue to work for South Africa and one that provides avenues for sustainable community development and economic empowerment.

The final terms of this transaction will be subject to the finalization of the proposed amendments to the Diamonds Act and an assessment by De Beers and Ponahalo Investment Holdings of the impact of these amendments on DBCM's business, as well as certain other potential value adjustment items which the parties may identify. In summing up, Nicky Oppenheimer (Chairman of De Beers), Lazarus Zim (Chief Executive Officer of Anglo American South Africa) and Manne Dipico (Chairman of Ponahalo Investment Holdings) comment as follows:

"I am delighted to welcome Manne Dipico and his business consortium, Ponahalo Investment Holdings, together with De Beers South African employees and pensioners, and disadvantaged women, people with disabilities and communities around DBCM's mines, as De Beers empowerment partners. This transaction recognizes the significant contribution that De Beers employees and pensioners have made to our South African business as well as the contribution and added value that Manne Dipico and his consortium of business partners, including a highly regarded group of business women, will bring to our South African business going forward."

"Anglo American is delighted about the successful formation of DBCM's empowerment partners. I congratulate De Beers and Ponahalo Investment Holdings, and wish them every success in their new partnership."

"I express our pride in joining DBCM as its empowerment partner and in investing in South Africa's premier diamond mining company. I am confident that the added value that Ponahalo brings to the table in terms of its significant leadership skills and seasoned corporate and private sector knowledge will allow us, together with DeBeers employees and communities as co-owners, to partner in working towards a sustainable future. Ponahalo will play a valuable role in supporting transformation in DBCM, creating significant wealth for Ponahalo's shareholders and beneficiaries and generally adding value to the wider South African economy."

De Beers' Diamond Trading Company (DTC) announced on October 27 that it has appointed Des Cavanaugh Sales Director. Des Cavanaugh will succeed Varda Shine on January 1, 2006, as she in turn is promoted as Managing Director. Cavanaugh, who earlier headed De Beers' Diamdel rough dealership network, has been instrumental in developing the firm's "Purchaser of Choice" strategy.

Jon Savage, who is currently head of sales planning in the DTC sales department, has been appointed Executive Director of a new Centralized DTC Business Strategy unit that will focus on setting the company's five year rolling strategic plans in accordance with De Beers Group objectives. The strategic sections of the current sales planning and purchasing teams will move directly into this new department.

The remainder of the purchasing business unit, the DTC's negotiating team, will join the Rough Diamond Division. Paul Rowley will return to London in January from his post as general manager of DTC Kimberley (South Africa) to run the purchasing team, and will be reporting to Brian McDonald, who is currently the DTC Executive Director of Sorting.

The DTC said that additional announcements about new marketing and human resources directors and the staffing of other posts affected by this round of appointments will be made in the near future. (AFNS)


Follow DiamondWorld on Instagram: @diamondworldnet
Follow DiamondWorld on Twitter: @diamondworldnet
Follow DiamondWorld on Facebook: @diamondworldnet

Also Read

LVMH’s Jewellery Division Holds Steady Amid Market Challenges in H1 2025

HRD Antwerp Launches Operations at Bharat Ratnam Mega CFC During IIJS Premiere 2025

U.S. Tariffs on Botswana Goods Take Effect Today, Impacting $500M in Diamond Exports

Jewelers of America Unveils 2025 CASE Awards Winners, Honouring Excellence in Jewellery Design

Rio Tinto Sees Rise in Diamond Sales, Reduces Losses at Diavik Mine