Nicky Oppenheimer, De Beers
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» Petra buys De Beers' Kimberley mine for R78.5m
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» De Beers pins hopes on 'Deb Zeppelin'

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S.African laws hamper De Beers' exploration
Allan Seccombe
Posted: Fri, 14 Sep 2007

[miningmx.com] -- DE BEERS feels South Africa's legal requirements for prospecting permits is hampering its search for more diamond prospects in the country it founded the world's largest diamond company, De Beers chairman Nicky Oppenheimer said on Friday.

De Beers feels there are more diamond finds to be hand in South Africa, but the difficulty comes in finding them, Oppenheimer said at a media conference.

De Beers is actively disposing its unprofitable assets to empowered groups in South Africa as it focuses on better returns from its mines. On Friday, it agreed the R78.5m sale of its Kimberley underground mine to AIM-traded Petra Diamonds and empowerment group Sedibeng Mining.
the permitting process is complicated
The grouping bought the Koffiefontein mine. De Beers is engaged with the government, state-run diamond company Alexkor and the community near the West Coast mine on the disposal of the Namaqua mine.

Production at Namaqua will drop by half from a million carats per annum to extend the life at the mine, making it a long term venture when it is merged with Alexkor, an industry source said.

De Beers is engaged in a process to sell its Cullinan mine and surface prospects near Kimberley to other parties. An industry source said sales of agreements could be reached before the end of this year for both ventures.

De Beers is reviving its Voorspoed mine to join its profitable Finsch and Venetia mines as well as its sea-mining operation. The small Oaks mine will reach the end of its life in first quarter 2009 and be shut.

De Beers would like to introduce its Zeppelin airship programme underway in Botswana to explore South Africa, but legislation is more of an impediment than a help, Oppenheimer said.

"We believe there is every chance people will still find more diamond mines in South Africa, but prospecting is a difficult business particularly for diamonds," Oppenheimer said.

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"One of the problems one has in South Africa, and this is not only for diamonds, is that legislation at present makes it difficult and I think the government is coming to appreciate that," he said.

"De Beers would like to be doing more prospecting than it is in South Africa. We wouldn't say that if we didn't think there were opportunities here," he added. "The difficulty is the permitting process is complicated."

A practical example, he said, would be the requirement for an environmental impact assessment study for the use of the Zeppelin airship, which provides a stable platform for very sensitive equipment, and which can cover a lot of ground in a relatively short period of time.

"We would like that tool operating in South Africa and yet to do that, the laws as they currently stand, require us... to conduct an environmental impact study over any land over which we were to fly. You'd think that the Zeppelin that floats over the land would hardly have an environmental impact," Oppenheimer said.

Talks are underway with the government to resolve the issues, he said.

This is not the first time the Oppenheimer family, which owns 40% of the world's largest diamond producer and marketer, has spoken out in public about issues vexing them in South Africa.

The most recent example was when Jonathan Oppenheimer said the government should subsidise diamond beneficiation to counter the higher costs involved, provoking an extraordinary retaliation from mines minister Buyelwa Sonjica who said the diamond giant should have expressed its concerns privately.

“We thought that our relationship was open enough for them to approach us if they had these concerns about beneficiation,” Sonjica said at the time.