[miningmx.com] — THERE will shortly be a new player on the African mining and exploration business – that is E. Oppenheimer & Son which manages the assets of the Oppenheimer family.
De Beers chairman Nicky Oppenheimer said he and son Jonathan intended using the $5.1bn proceeds from the sale of the Oppenheimer family stake in De Beers to pursue projects in South Africa and Africa.
Those ventures could include a return to the diamond mining business, although Oppenheimer pointed out there was a two year restraint of trade clause concerning this in the agreement signed with Anglo American.
“I have never believed in just leaving money in the bank,’ he told Miningmx. “Africa and South Africa are really exciting places to look at it in terms of business opportunities and we will continue to operate out of Johannesburg.”
The decision to sell out to Anglo has taken the market by surprise, not least because of comments made by Oppenheimer to Miningmx at the beginning of August when queried on his plans.
Asked at the time specifically about market rumours that Anglo was looking to buy the Oppenheimer stake in De Beers, he said: “Not that I have heard. I think that’s more a case of you guys in the media busy writing columns about it.
“I have no feel for anything like that in my immediate future which is what, five years? But who knows? The world changes very quickly.”
That, it seems, is precisely what has now happened because Oppenheimer said the decision to sell followed an approach about two weeks ago by Anglo chairman John Parker with the purchase proposal.
“I was extremely surprised when John Parker came to see me about two weeks ago and put an offer on the table,” said Oppenheimer. “The decision to accept was not an easy one and we are saddened by the end of a century of history between the Oppenheimer family and De Beers.
“But it was the decision finally taken by the family for reasons that I am not prepared to go into it.”
Asked why Anglo American had decided to make the offer Oppenheimer replied: “I don’t know. You would have to ask Anglo that. They are about to get a lot of money from the sale of assets in Chile but, really, I don’t know.”
That’s a reference to the Chilean government’s stated intention of exercising an option to buy 49% of Anglo’s Chilean copper mining subsidiary Anglo Sur for up to $6.75bn.
In a report published on October 17, RBC Capital Markets analyst Des Kilalea suggested that boosting its stake in De Beers was one of the possible uses that Anglo American might find for that cash.
Oppenheimer indicated Jonathan would play the key role in developing whatever E. Oppenheimer & Son decided to go after in Africa. “I’m 66. Jonathan has the energy, drive and determination and he’s all fired up to do business in Africa,” he said, adding he could provide no details of specific development plans at this stage.
“This has all happened very quickly. We have about 9 to 10 months to wait before we get the cash and during that time we will think about what we intend doing.’
Asked how he believed the diamond trade would react to news that the Oppenheimers were selling out of De Beers, Oppenheimer stressed the strength of the current management team at De Beers.
Oppenheimer took over as chairman of De Beers in 1998 – replacing former chairman Julian Ogilvie Thompson – who had been heavily criticised by some in the diamond trade as putting Anglo American’s interests ahead of those of the diamond sector.
“Anglo has a deep understanding of the diamond business and is fully supportive of the De Beers management team and the De Beers business model,” said Oppenheimer. “It is also clearly beneficial to have Anglo with its deep pockets standing behind De Beers.
“That said, if I flatter myself I do believe there is something to the connection between the Oppenheimer family and the diamond trade which is frequently a very family-orientated business.’
In August Oppenheimer told Miningmx: “I believe De Beers with an Oppenheimer chairman is seen by the diamond trade as a comfort. There’s someone running the organisation who thinks of more than just what the profit will be at the end of the next quarter.”
