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Cullinan is virtually only source of blue diamonds - Johan Dippenaar, Petra
In an interview on Radio 2000 @ 18:00 on Friday, 23 November 2007
[miningmx.com] -- THE Cullinan diamond mine in South Africa is virtually one of the only sources of rare blue diamonds, said Johan Dippenaar, CEO of Britain's Petra Diamonds. Petra outbid an estimated nine other competitors offering R1bn for the mine owned by De Beers for about a century.
"What we saw in this transaction is it is obviously a very historical mine and a source of so many of the world's famous and large diamonds," said Dippenaar. "Also very few people are aware that it's virtually the only source of blue diamonds, which are very rare and fetch a lot of money on the market," he said.
Dippenaar was speaking on the Moneyweb Power Hour.
He added, however, that Petra Diamonds would have to spend about R1bn in capital expenditure over six years in order to fully develop the mine's potential. The capital expenditure would be shared with Petra's Saudi Arabian partner, Al
Rajhi Holdings.
"We intend to spend about R380m in today's money in the first two years, and over the first six years it will probably amount to about R1bn in total," Dippenaar said.
Capital would be spent developing the underground workings although initial mining work would begin with surface tailings totalling some 165 million tonnes of diamond bearing material.
The viability of the investment also had to account for some R330m in environmental liabilities, although Dippenaar said this amount was an end of mine life calculation. Assuming the development of the C-Cut, a large capital project contained in the Cullinan lease area, the liability was calculated in terms of money 45 to 50 years from now.
The going-concern part, the mining taking place on the just over 700-metre level, and that would provide us with in excess of a million-carat production for at least 20 years," said Dippenaar.
"And then there's obviously the very well-known
Centenary Cut, or C-cut, as people refer to it, which, according to De Beers contains 133 million carats, valued anything from $7bn upward.
"So we certainly see in Cullinan a mine which will provide us with very high production for many, many years to come," Dippenaar said.
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