Petra Diamonds, the junior diamond firm, has yet made a predatory move against De Beers by acquiring the entire stake held by the world diamond giant in Williamson Diamonds Limited in Tanzania, a joint statement from the two companies said this week.
Williamson Diamond Limited (WDL), ÔÇö which was 75 percent held by De Beers and the rest by government of TanzaniaÔÇöhas seen its production declining in recent years and De Beers stake is being sold for US $ 10 million.
The company started in 1958 and is in Mwadui area and is being sold for US $ 10 million. According to the recent figures compiled by Chaim Even-Zohar, a leading diamond expert, the mine’s production in 2005 stood at 221,286 carats valued at US $ 25.47 million ÔÇô translating to US 115.10 per carat.
Williamson mine has been operated by WDL which in turn was owned by Willcroft & Co Limited, a wholly-owned subsidiary of De Beers registered in Bermuda.
The new move will see Petra Diamonds, which already owns three former De Beers mines in South Africa having four mines under its portfolio. The Williamson Mine will be jointly owned by Petra Diamonds and the Tanzanian government.
Johan Dippenaar, chief executive officer of Petra Diamonds said in a statement that “Petra already owns the world’s major diamond mines, Cullinan, Koffiefontein and, on completion, Kimberly Underground. Williamson will add a fourth world class mine to its portfolio, with the potential to deliver considerable value to our shareholders.
“This acquisition also marks Petra’s entry into Tanzania, further diversifying the group’s geographical spread across Africa. We thank the government of Tanzania for their support in completing this transaction and we look forward to working with the government as our partner in taking the mine forward,” Dippenaar said.
Commenting on the transaction, De Beers’ Managing Director, Gareth Penny, said the move is part of the diamond giant to position it for long tern growth by reviewing its portfolio mining assets and focusing on those with the best strategic fit.
Penny, who is expected to be here on Wednesday to try to quell a flare-up between De Beers and African Diamonds PLC, is regarded as a the strongman for the company who came up with some revolutionary move in transferring some of the diamonds activities from Europe to Africa and led the sale of the ‘uneconomical “ mine to third parties.
The new development is expected to boost Petra Diamonds’ cutting and polishing business which is aimed at increasing shareholders’ value as it aims to be a significant player in the diamond industry.
Petra Diamonds also has an exploration license in Botswana and it has said its finds in the country are very encouraging.
The South African-based company, which has been on a growth path in the last 24 months by acquiring three diamond mines assets is also doing some explorations in the southern African region.
“We are doing exploration in Botswana and we expect that the next biggest mine will probably be in Botswana, South Africa or DRC because the biggest mines are currently there. And we have to play in that space,” a company executive told Israeli Diamond conference earlier this year.
Petra Diamonds has bought Kalahari DiamondsÔÇöowned by the mining giant BHPÔÇöwhich gave it an access to a concession of 52,000 km2 and so far has found 34 carats within that area in Botswana.
The company is also involved in exploration exercises in the DRC where it said the results coming out of that country are very encouraging. So far, regarding its DRC project they have found 77 carats.