The world’s top diamond producer, De Beers, and the South African government will form a new black-controlled diamond mining company, they said on Friday.
The new company, which might later be listed on the JSE, will combine the assets of state mining group Alexkor and the Namaqualand mine unit owned by the South African unit of De Beers.
”It is going to be a serious diamond player,” De Beers chairperson Nicky Oppenheimer told a news conference.
De Beers has been seeking to meet government demands to include more black people in the mainstream economy, opportunities they were denied during decades of apartheid.
To help forge the new firm, De Beers would give a 20% stake in Namaqualand Mines — which last year produced one million carats — to South Africa’s mining ministry at no cost to the government.
De Beers said it will not operate the new unnamed company and will dilute its stake over time. Both Alexkor and De Beers’s Namaqualand are involved in mining diamonds on South Africa’s north-west coast.
The announcement confirms a report by Reuters on Thursday, quoting an industry source saying De Beers and the government were due to announce another black-empowerment deal.
Cut poverty
Minister of Minerals and Energy Buyelwa Sonjica welcomed the deal, saying it was a good example of a public-private partnership.
The deal will help alleviate poverty and contribute to job creation in one of South Africa’s poorest provinces, the Northern Cape, she told the news conference.
Oppenheimer said an independent valuation of the two firms’ assets will take place before the creation of the new company in 2008. It might later be listed on the JSE.
The ministry said there is no connection between the deal and resolution of a dispute with De Beers over alleged stockpiling of diamonds in the 1990s. A senior ministry official said on Friday that dispute had been resolved.
De Beers Namaqualand operation was established in 1928 and contributes about 7% to the total output of De Beers Consolidated Mines, the group’s South African unit.
Alexkor, established in 1989, also mines alluvial diamonds on the north-west coast.
The group finalised a R3,7-billion deal last year to bring black investors into its South African business unit.
Former miner turned businessman Manne Dipico, who heads the black investment company that bought a 26% stake in the subsidiary, played a prominent role in arranging the new deal. — Reuters