Acquisition of Finsch mine to boost Petra’s sales ’10-15 percent’
The world’s largest diamond producer De Beers has announced the sale of its Finsch mine to Petra Diamonds.
The South African mine will be handed over to Petra – the largest diamond producer on London’s junior AIM market – for more than $200m in cash.
Petra has been in talks with De Beers since September to acquire the mine, which they expect to boost their diamond sales by 10-15 percent in the 2011 fiscal year. De Beers has control of around 40 percent of the rough or unpolished diamond market. A spokesperson for De Beers said earlier this week that rough diamond prices are expected to rise further during 2011, but will not match last year’s sharp price increases.
The acquisition of the mine came after a lengthy selection process by De Beers, which saw a focus on the long-term sustainability of the mine. Petra met several criteria, and succeeded in winning the takeover of the mine based on Petra’s access to funding, a detailed evaluation of its technical capacity, its proven track-record and the company’s strong socio-economic focus.
The chairman of De Beers Consolidated Mines (DBCM), Barend Petersen said: “We are particularly pleased to have been able to conclude this transaction with Petra. Their track record as a hardrock underground diamond miner bodes well for the long-term sustainability of Finsch going forward, and we are confident that this will help ensure continued investment in the town of Lime Acres and the Northern Cape for many years to come.”
Petersen added: “Perhaps most importantly, today’s announcement brings together a significant pool of employee and women’s organisations and local participation that will ensure that a wide range of empowerment groups will benefit form the mine’s future success.”
Finsch is South Africa’s second-largest diamond mine by production. The takeover will make it Petra’s eighth producing mine.