diamond giant De Beers to sell 26% of unit to black group

[london]

De Beers Set to Unveil Big Empowerment Deal Today



Business Day (Johannesburg)

8 Novembre 2005


Charlotte Mathews
Johannesburg

GLOBAL diamond giant De Beers is expected to announce black economic empowerment partners to its South African operations today.

In a general invitation to the media and analysts, De Beers Consolidated Mines (DBCM) said yesterday that chairman Nicky Oppenheimer and MD Jonathan Oppenheimer would make "an announcement of the most significant change of ownership of the company since its formation in 1888".

I-Net Bridge reported that a source close to the company confirmed the announcement would be on a black empowerment deal.

Earlier this year, the group's outgoing MD Gary Ralfe said a deal involving black partners would be completed this year and more than 100 prospective empowerment partners had identified themselves.

Foreign sources tipped former Northern Cape premier Manne Dipico as one of the members of the consortium, while local sources suggested that Tokyo Sexwale's Mvelaphanda Resources would be involved.

Dipico, who was currently heading the ANC's local government election team, is a shareholder in Pamodzi Investments, which has a resources division.

Mvelaphanda Resources is already in a joint venture partnership with De Beers at Ndowana. Sexwale is also believed to have supported De Beers' re-entry into Angola earlier this year.

Mvela Resources spokesman James Wellsted yesterday denied the De Beers empowerment deal involved Mvela Resources.

Two analysts, who asked not to be named, said that the deal would probably emphasise broad-based ownership, including employees and community trusts.

But if the De Beers empowerment deal was to be similar to the recent deal unveiled by its parent, Anglo American, involving the separation of Kumba Resources into an iron-ore company and a base metals and coal producer, it would require a substantial black-owned company as lead partner. In the Kumba deal, Eyesizwe Coal was the leading entity.

Analysts said it was difficult to value DBCM, partly because it was a division of the unlisted De Beers Group and was not separately reported, and also because only two of its seven South African mines -- Venetia and Finsch -- were profitable last year.

According to DBCM's recent submission to Parliament on the Diamond Amendment Bill, Venetia made a net profit of R2,1bn last year, while Finsch made R227m. Taking the loss from the other five mines into account, De Beers Consolidated Mines' net profit was R1,69bn.

Venetia's strong operating margins, which an analyst said put it amongst the world's five most profitable mines, would make it an expensive asset for a broad-based consortium, so it might be excluded from the deal.

In terms of SA's mining charter, 15% of mining companies' units of production, not 15% of their assets, had to be black-owned in the medium term, and 26% in the longer term.
http://fr.allafrica.com/stories/200511080042.html

 

[london]

De Beers to sell 26% of unit to black group
2005-11-10 Beijing Time
THE mining giant, De Beers, announced on Tuesday that it would immediately sell 26 percent of its South African mining subsidiary to a black empowerment group in a deal that it said would comply with South African legislation aimed at increasing black ownership.

Under terms of the deal, Ponahalo Investment Holdings, a new black empowerment company, will pay 3.8 billion rands (US$560 million) for the 26 percent stake in the subsidiary, De Beers Consolidated Mines.

Half of Ponahalo is owned by De Beers South African-based employees and pensioners and half by a consortium of business and broad-based groupings that is 90 percent owned by people historically disadvantaged by apartheid under previous white governments.

Tensions between the South African government and the white-dominated mining industry are long-standing. The government contends the industry has exploited South Africa's mineral wealth and has resisted moves toward addressing the legacy of apartheid.

De Beers, which is 45 percent owned by the AngloAmerican mining conglomerate, controls more than half the diamond trade. Its net profits for 2004 were about 25 percent up over the previous year at US$498 million.

South African government also is going ahead with plans to pass the Diamonds Amendment Bill that seeks to establish a new state diamond trader that could buy rough diamonds.
http://www.shanghaidaily.com/art/2005/11/10/212063/De_Beers_to_sell_26__of_unit_to_black_group.htm

 

[Makkonnen]

black people paying for what was always theirs to begin with? yeah great

 

[nittie]

De Beers, which is 45 percent owned by the AngloAmerican mining conglomerate, controls more than half the diamond trade. Its net profits for 2004 were about 25 percent up over the previous year at US$498 million.

Diddy make this kind of money selling t-shirts

 

[Disanddat]

Hope SA will be wary of trading their white slave master for a black one. When you are the one being whipped I am not sure it makes a difference who is at the other end of the whip.

I think African governments should own most of the resources so that the benefits can be felt by everyone (better roads school, poverty eradication, etc) When some rich black person owns everything it hardly makes a difference to the average person in the country.