De Beers Consolidated Mines (DBCM), the South African division of global diamond giant De Beers, has concluded the sale of Dancarl Diamonds, a mine in the Northern Cape, to a black-owned partnership consisting of Sedibeng Mining and Meepong, a women’s grouping, together with Australia’s Crown Diamonds NL.
Meepong is predominantly from the Northern Cape, while Crown Diamonds is an Australian-listed diamond-mining company with technical expertise, particularly in fissure mining (a fissure is a mineral-bearing crack or fracture in rock that requires specialist mining skills).
The agreement was signed in Johannesburg on Wednesday, DBCM said, by Sedibeng chairperson Clyde Johnson; the chairperson of Meepong, Daisy Damons; Johan Dippenaar, CEO of Crown Diamonds NL; and Jonathan Oppenheimer, managing director of DBCM.
Oppenheimer congratulated the empowerment group for concluding the corporate deal within a few weeks, for including previously marginalised sectors of South African society in the consortium, as well as for encouraging foreign investors into South Africa as partners in black economic empowerment (BEE) deals.
The head of new business for DBCM, Kerwin Rana, commented: “We are extremely pleased with the outcome of this transaction, as it facilitates the growth of a black-owned diamond-mining company in South Africa, the participation of local Northern Cape-based entrepreneurs and especially the involvement of women.
“DBCM is committed to seeking opportunities to undertake further such transactions in the future”.
Through the sale, Oppenheimer said DBCM has achieved a number of key empowerment objectives, including:
- Creating a majority black-owned (60%) diamond-mining business at Dancarl “that we believe will serve as a model for the creation of further viable black mining businesses”;
- Facilitating the empowerment of women, as in the proposed scheme, 20% of Dancarl’s shareholding will be in the hands of previously disadvantaged South African women, predominantly from the Northern Cape;
- Ensuring the participation of entrepreneurs from the Northern Cape (both Sedibeng and the women’s grouping are predominantly Northern Cape-based);
- Ensuring that the business is sustainable in terms of access to adequate technical, operational and financial resources, which have been achieved through the involvement of Crown Diamonds; and
- Facilitating job creation, with Sedibeng estimating that between 100 and 200 new jobs will be created at Dancarl within six to 12 months of the sale.
The DBCM managing director said the Sedibeng-led partnership was selected as the preferred bidder based on its strong empowerment credentials, including the empowerment of women, its local (Northern Cape) participation and its technical ability in addition to the financial value of its offer.
The venture will be 60% black-owned overall.
Sedibeng chairperson Clyde Johnson said: “Sedibeng is particularly pleased to have been selected as the preferred bidder in the sale of the Dancarl mine by De Beers. This process will take Sedibeng to its next level of growth, namely that of being an underground operator.
“It is also encouraging to see De Beers changing the manner in which it conducts its diamond business in keeping with the new mining Act and Charter.
“Sedibeng, through this acquisition, with Crown Diamonds as its partner, hopes to form an ongoing alliance with the world’s pre-eminent diamond company.”
In the interests of conducting a process that is inclusive and objective, De Beers has appointed Umbono Corporate Advisors, a BEE investment banking company specialising in empowerment transactions, as transaction advisers.
Commenting on the sale, Umbono director Phiwayinkosi Mbuyazi said: “We believe that the rigorous process undertaken by De Beers in this transaction sets a new standard for empowerment deals of this nature.” — I-Net Bridge