[miningmx.com] – DE BEERS Consolidated Mines (DBCM) has bought De Beers Sightholder Sales South Africa (DBSSSA) in a deal reportedly worth R2.5bn and that finalises its commitment to meeting the regulations of the mining charter.
The diamond group said today that in buying DBSSSA it had empowered it by 26% by dint of its association with shareholder Ponahalo Holdings, its long-standing empowerment partner.
“Our clients in the diamond cutting industry will also benefit as they will be transacting with an empowered mining and trading company going forward,’ said Barend Petersen, executive chairman of DBCM.
The transaction is expected to increase cash flow into DBCM and Ponahalo strengthening the balance sheet of Ponahalo and funding De Beers’ growth plans, said
Manne Dipico, chairman of Ponahalo Holdings and DBCM’s deputy chairman.
Petersen said the transaction came at a time when the global diamond market was improving. “There is reason to be optimistic about diamond demand continuing,” he said at an event in Kimberley in South Africa’s Northern Cape province.
“Economic recovery is underway in the US where demand for diamond jewellery rose 7% last year and diamond consumption continued rising in emerging markets such as China,” said Petersen.
“Luxury brands are driving demand notably amongst young western consumers and consumers of all ages in emerging markets,” he said. De Beers is 85% owned by Anglo American with the balance held by Botswana’s Debswana.
In terms of the mining charter, South African companies are expected to have met a number of empowerment, social and employment equity targets including the sale of 26% of company shares or units of production.
The Department of Mineral Resources is currently auditing the industry to see the level of compliance ahead of the mining charter deadline around the end of this year.
