Cullinan gem of a deal for Petra

DE BEERS Consolidated Mines'R1-billion sale of its Cullinan diamond mine near Pretoria took an important step forward with yesterday's announcement that the mining rights would be converted into new-order rights.

DE BEERS Consolidated Mines'R1-billion sale of its Cullinan diamond mine near Pretoria took an important step forward with yesterday's announcement that the mining rights would be converted into new-order rights.

The announcement was made by the department of minerals and energy.

The buyer, Petra Diamonds Cullinan Consortium, comprises AIM-listed diamond-mining junior Petra Diamonds, Saudi-based investment company Al Rajhi Holdings and empowerment partner Thembinkosi Mining Investments.

Thembinkosi's shareholders include Sedibeng Mining, Namoise Mining, Umnotho weSizwe Group and Petra Employee Share Trust.

The sale, which was announced last month, is considered a "transformational deal" for Petra and creates new players in the South African diamond industry.

David Noko, managing director of De Beers Consolidated Mines, said: "In the past year the sale by De Beers of mining operations to empowerment consortiums has enabled us to focus our management attention on building two new mining operations, Voorspoed in the Free State and the Peace In Africa marine mining operation in the Northern Cape, while simultaneously investing in capital and other improvements at our established mines."

The second-largest producer of diamonds in South Africa after De Beers, Petra Diamonds also has operations in Angola, Botswana and Sierra Leone.

Petra said completion of the transaction was now conditional on ministerial consent to the cession of new-order mining rights in respect of Cullinan to the Petra consortium, and the department of minerals and energy consenting to the cession, transfer and delegation of the rehabilitation obligations and liabilities.

Other conditions include competition authority and regulatory approvals.

Petra said it expected that the remaining conditions would be met between May and July next year.

Petra, whose share of the acquisition price is R325-million, also acquired the Dancarl Mine near Barkly West and the Koffiefontein mine from De Beers.

It also reached a deal to purchase the De Beers's Kimberley underground mines in September.

The diamond giant said the deals allowed it to adjust its South African mining portfolio, releasing capital from marginal operations that other companies "were better placed to manage". - I-Net Bridge