DBCM in talks with Trans Hex to Sell Namaqualand

De Beers Consolidated Mines (DBCM) on Thursday said JSE-listed gem miner Trans Hex Group had approached it to buy its alluvial diamond operation Namaqualand mines.

DBCM is looking to divest itself from Namaqualand as an entity, not just part of its operations, and said the talks were still in an early stage.

“Trans Hex don’t know enough about it to look into buying,” Tom Tweedy, a DBMC spokesman told IDEX Online, noting they had not yet hosted Trans Hex or given them access to data to verify information and get an idea to make a proposal.

Trans Hex Group Limited is engaged in the exploration, mining and marketing of alluvial diamonds from both land and sea operations. It has operations in South Africa, Angola, Namibia and Liberia.

Namaqualand is the largest alluvial diamond mine in South Africa with production in 2008 projected to be approximately 330,000 carats.

Tweedy noted that if the talks were successful it would probably take at least a year before DBCM would transfer the mines.

“When we sold other mines it normally took about 6 or 7 months in order to get a full-on offer that we negotiated upon and for a conclusion to be reached.  The transfer can take anything from 6 months to a year,” Tweedy said.

DBCM in February 2007 committed to introducing a mining company with empowerment credentials to Namaqualand mines. In the past few years mines such as Koffiefontein and Cullinan Diamond Mine have been transferred to consortia with broad empowerment credentials

Trans Hex is classified as a Black Economic Empowerment (BEE) company and thereby fits the interests of DBCM as it seeks to meet new South African government rules on increasing the involvement of previously disadvantaged groups.

BEE is a program launched by the South African government to redress the inequalities of Apartheid by giving previously disadvantaged groups, including black Africans, coloreds and Indians economic opportunities previously not available to them.

In a previous compliance with BEE, De Beers sold 26 percent of its South African division to a black investment firm called Ponahalo Capital in 2006. The stake was purchased for $611 million by Ponahalo Holdings whose ownership is split equally between De Beers staff and pensioners and Ponahalo Capital.

The diamond giant also said it was committed to supporting the consolidation of West Coast diamond mining assets to help improve the sustainability of mining in the region.