De Beers puts Kimberley diamond mine up for sale

May 21, 2015, 11:59 AM EDT
An Israeli diamonds buyer checks the quality of a diamond during the International Diamond Week (IDW) on February 10, 2015 in the Israeli city of Ramat Gan, east of Tel Aviv.
THOMAS COEX/AFP/Getty Images

De Beers said it will be putting its Kimberley diamond mine in South Africa up for sale. The company stated that over the course of the past decade, it has taken steps to sustain the operation and did succeed in maintaining production during the economically challenged period, writes Rapaport

Phillip Barton, the CEO of De Beers Consolidated Mines, said, “It is encouraging that our work, to date, in considering all options, has shown that Kimberley mines may not have to close in the near future. We are liaising with directly affected stakeholders outlining feasible options to extend the potential of the mine and its assets. We are engaging fully with employees, union representatives and with the government at national and other levels; most importantly with the Northern Cape government and the municipality. The asset has a superb team of managers and operators and we are keen to offer the mine as a going concern to facilitate a greater degree of job security. The mine is De Beers’ second largest producer in South Africa with production in 2014 of 722,000 carats. With an appropriate operator, this asset has potential into the next decade.”

De Beers said it hoped to conclude the sale process "in a matter of months," Reuters reports. The company, which has been mining at Kimberley for more than a century, said it had invested in the mine to 2018 and that the new owners would need only stay-in-business capital, potentially extending life of the mine to 2030. 

The precious stones were first discovered near the town in 1871, about a mile away from the De Beers farm that would give its name to the former monopoly, notes Bloomberg. De Beersgained full control of the mine in 1888. The producer will retain properties and operations in the town of Kimberley, about 480 kilometres southwest of Johannesburg. These include sorting, financial services and ecology operations, a spokeswoman for the company said.

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