De Beers sells tailings, exits rehabilitation liability

15 08 2010

DE BEERS has sold 60 million tonnes of tailings and stockpiles at Kimberley for R10.3m to the Small Miners Forum, neatly exiting its rehabilitation obligations there. There are 750,000 tonnes of stockpiles and 14.5 million tonnes of tailings. The Small Miners Forum also bought a further 45 million tonnes of tailings for one rand ($0.14). De Beers amassed the tailings and stockpiles from mining the Bultfontein and Dutoitspan kimberlite pipes. The tailings have been an important source of diamonds for the Kimberley area since 1978, the company said in a statement. Kimberley Mines, the surface operation owned by De Beers, cannot profitably exploit the resources in the tailings because of its high overhead cost structure and those resources are no longer seen as core, said David Noko, chairman of De Beers Consolidated Mines (DBCM), the South African division of the diamond company. “We believe there are opportunities for other players to take advantage of those assets that may not have a strategic fit with what we are doing,” he said. The decision by DBCM to sell the tailings “forms part of a review of existing operations to focus resources on those operations that fit the company’s strategy to ensure a sustainable profitable company beyond 2014.”

De Beers is the world’s largest producer of rough diamonds. It is 45% owned by Anglo American. The Small Miners Forum comprises four small mining groups, which had been exploiting the tailings for De Beers’ account. De Beers has been casting off its economically unviable assets in South Africa, having already sold the Koffiefontein mine and the Kimberley underground mine to Petra Diamonds. It has a shortlist of bidders for its Cullinan mine and is finalising a deal with government-owned Alexkor for the million-carat/year Namaqua operation on the West Coast. De Beers is bringing the Voorspoed mine in the Free State province into production and has also deployed a ship to vacuum diamonds off the seabed on South Africa’s West Coast. De Beers still has a presence in Kimberley. Its Kimberley Mines and a new R800m plant there are the second best performer amongst the South African assets, producing 1.5 million carats a year behind Venetia. The four companies making up the Small Miners Forum are Super Stone Company, Super Kolong, Sedibeng Mining and Samba Trading. All four are based in Kimberley.

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