De Beers sells Cullinan for R1b

JOHANNESBURG – De Beers, the world’s biggest diamond producer, said yesterday it had sold its historic Cullinan mine to a consortium led by Petra Diamonds for one billion rand in cash.

De Beers, 45 per cent owned by mining group Anglo American Plc, said in February it planned to dispose of the loss-making mine. The consortium comprises of Petra and Saudi-based investment firm Al Rajhi Holdings, each buying 37 per cent stakes, with black-owned Thembinkosi Mining Investments owning the remaining 26 per cent.The mine was made famous as the source of the largest gem diamond ever found, the 3 106-carat Cullinan Diamond, cut into large gems set in Britain’s Crown Jewels.The deal marks the third mine which De Beers regarded as unprofitable that it has sold off to Petra, coming after disposals of the Koffiefontein and Kimberley underground mines.”It brings a major resource to the group with the expectation of adding significantly to annual production, elevating Petra into the league of the world’s major diamond producers,” Petra’s Chairman Adonis Pouroulis said.In the year to December 2006, De Beers produced 1,15 million carats at the Cullinan mine, with a market value of R505 million.Petra said it expected annual output to meet and possibility exceed the recent levels.The sale of the mine is part of a restructuring by De Beers to focus on higher-margin activities.”This will enable De Beers to best use our capital to invest in exciting growth opportunities and to sustain a strong diamond mining business in South Africa for the future,” De Beers Managing Director Gareth Penny said.Nampa-ReutersThe consortium comprises of Petra and Saudi-based investment firm Al Rajhi Holdings, each buying 37 per cent stakes, with black-owned Thembinkosi Mining Investments owning the remaining 26 per cent.The mine was made famous as the source of the largest gem diamond ever found, the 3 106-carat Cullinan Diamond, cut into large gems set in Britain’s Crown Jewels.The deal marks the third mine which De Beers regarded as unprofitable that it has sold off to Petra, coming after disposals of the Koffiefontein and Kimberley underground mines.”It brings a major resource to the group with the expectation of adding significantly to annual production, elevating Petra into the league of the world’s major diamond producers,” Petra’s Chairman Adonis Pouroulis said.In the year to December 2006, De Beers produced 1,15 million carats at the Cullinan mine, with a market value of R505 million.Petra said it expected annual output to meet and possibility exceed the recent levels.The sale of the mine is part of a restructuring by De Beers to focus on higher-margin activities.”This will enable De Beers to best use our capital to invest in exciting growth opportunities and to sustain a strong diamond mining business in South Africa for the future,” De Beers Managing Director Gareth Penny said.Nampa-Reuters