17 September 2007
London-listed Petra Diamonds and a local empowerment partner have bought the disused Kimberley Underground mines in the Northern Cape province from De Beers for R78.5-million and plan to restore production within the next six to 12 months.
Petra Diamonds said in a statement last week that it had formed a joint venture with Sedibeng Mining, its black economic empowerment (BEE) partner, to acquire the mining and associated assets of the Wesselton, Du Toitspan and Bultfontein mines, which together constitute the Kimberley Underground mines.
Petra will own 74% and Sedibent 26% of Kimberley Underground mines, which has an expected lifespan of at least 12 years. De Beers halted its underground operations around Kimberley in late 2005.
“Alongside Petra’s highly prospective Angolan exploration assets, the acquisition of Kimberley Underground is an important addition to Petra’s substantial base of producing assets in South Africa,” Petra Diamonds chairman Adonis Pouroulis said.
“Together, Kimberley Underground, Koffiefontein and Petra’s fissure mines will contribute an annual production in two years’ time of around 400 000 carats.”
Petra expects annual production from Kimberley Underground to be in excess of 100 000 carats, bringing in revenue of approximately US$16-million (R115-million) per year.
The company said that it would pay De Beers
R15-million in cash, while the remaining
R63.5-million would be used to assume De Beers’ rehabilitation obligations for Kimberley Underground mines.
According to the company, which has operations in South Africa, Botswana, Angola and Sierra Leone, it will run the mines on a care and maintenance basis on behalf of De Beers until it receives all required mining authorisations from South African authorities to mine in its own right.
These include the transfer of mining rights and the transfer and delegation of rehabilitation obligations and various liabilities.
Petra diamonds already operates two mines in the Free State province and one each in North West province and the Northern Cape.