Why De Beers is selling Kimberly Mines to Ekapa Minerals
De Beers Consolidated Mines (DBCM), will be selling their Kimberley Mines in the Northern Cape (its oldest diamond mine), to Ekapa Minerals – a group comprised of Ekapa Mining and Petra Diamonds Limited, for around R100 million. This will mark the end of 125 years of operating in the region.
Why De Beers sold to Ekapa
Out of the 70 bids received for the Mine, De Beers went with Ekapa Minerals because of its technical, financial and economic capability as well as their strong corporate social responsibility credentials.
The sale of the De Beers Kimberly Mines to Ekapa Minerals is expected to ensure that those employed at the Mine, remain employed there after the sale.
Ekapa Minerals would process the remaining resources at Kimberly Mines in a sustainable manner, which fits in with De Beers’ strategy extending the life of the Kimberley Mines beyond 2018.
About De Beers
De Beers was established in 1888 and is currently the world’s leading Diamond Company with mining operations in Botswana, Canada, Namibia and South Africa.
Kimberley Mines produced 722 000 carats in 2014 and Ekapa Mining expects it to produce 700 000 carats per annum in the first three years of taking ownership of the Mines.
The De Beers group produces 32 million carats annually
De Beers will still maintain presence in Kimberley via its other businesses including:
- De Beers Sightholder Sales South Africa
- The Ecology Division
- The Microdiamond Laboratory
- The Big Hole
- The Technical Training Centre
- The Pension Fund and Benefit Society functions
In South Africa, De Beers will continue to operate two other diamond mines, namely Voorspoed Mine in Kroonstad and Venetia Mine in the Limpopo Province.
De beers will be investing about US $ 2billion to take Venetia Mine from an opencast to an underground operation. They believe that this will extend the life of Venetia Mine from 2021 to beyond 2040.
Who do you think benefits the most from this deal?