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De Beers and Ponahalo Holdings today announced the successful conclusion of the empowerment of De Beers Sightholder Sales South Africa (DBSSSA), the diamond trading business based in Kimberley, Northern Cape Province.
The purchase by De Beers Consolidated Mines (DBCM) of DBSSSA brings with it the ownership of 26% by Ponahalo Holdings of the Company’s diamond sorting and valuation business in South Africa. De Beers has therefore achieved its commitment in terms of the South African Mining Charter to empower both its diamond mining (achieved in 2006) and its diamond trading business before the end of 2014.
The event was attended by members of the Department of Mineral Resources led by the Deputy Director General Joel Raphela representing the Minister, Advocate Ngoako Ramatlhodi, the Acting Premier of the Northern Cape Mr. Alvin Botes and the Executive Mayor of Sol Plaatje Municipality Mr David Molusi. DBSSSA clients (Sightholders) and the boards of DBCM and Ponahalo attended this landmark event.
All of De Beers South African diamond production of nearly five (5) million carats per annum is sorted and valued in Kimberley; the rough diamond trading centre of the country where the company holds 10 diamond sales a year supplying South Africa’s leading diamond cutting factories with diamonds, over 40% by value.
Barend Petersen Executive Chairman of DBCM commented on the transaction and the demand for diamonds in consumer markets: “This major deal is good for broad based empowerment in South Africa and for the resource based sector which though mature is still delivering livelihoods after 150 years. De Beers is bringing the largest diamond trading business in South Africa into the empowerment circle by ensuring that the financing of this transaction is one of realistic benefit to all parties. Our clients in the diamond cutting industry will also benefit as they will be transacting with an empowered mining and trading company going forward.”
Addressing the strength of the consumer market for diamonds Petersen noted: “There is reason to be optimistic about diamond demand continuing. Economic recovery is underway in the US where demand for diamond jewellery rose 7% last year and diamond consumption continued rising in emerging markets such as China. Luxury brands are driving demand notably amongst young western consumers and consumers of all ages in emerging markets. We believe De Beers with its legendary and credible association with diamonds has a strong foundation to be the world’s leading diamond brand.”
The Chairman of Ponahalo Holdings and Deputy Chairman of DBCM Manne Dipico illustrated the participation of the empowerment shareholder in De Beers: “The transaction will increase cash flows into DBCM and therefore into Ponahalo Holdings funding both the growth plans of De Beers in South Africa and strengthening the balance sheet of Ponahalo. Over time as the debt is repaid the beneficiaries of Ponahalo Trusts, who include employees and retirees, will benefit as well as community projects based where we operate which have already received R28 million since 2006.
Dipico noted that Ponahalo “is managed independently from De Beers with a hands-on leadership role in De Beers' decision making and operations. Ponahalo’s Barend Petersen is Chairman of DBCM and on the international DBsa board, Moss Mashishi is Chairperson of the Investment Committee and Governance and Assurance Committee and with Cheryl Carolus on the board and Thandi Orleyn as Chairperson of the De Beers Fund, the Company is well served by its empowerment shareholder.
Phillip Barton CEO of DBCM said he welcomed the skilled and specialist personnel of DBSSSA into a proudly empowered South African company. He said, “Kimberley is famous for many things, a City of Firsts which continues today with the first female head of DBSSSA – Mpumi Zikalala – leading DBSSSA forward to become this country’s first empowered major diamond trading business.”
Barton concluded that besides beneficiation, in which DBSSSA plays an important role; “Mining is the largest foundation for much of the economic growth we see today and we can all play a role in sustaining that potential for tomorrow. With appropriate commercial strategies and respect for the social and ecological environment we live in, mining can still make a positive contribution in the future. Major investments in mines as well as lower cost operations will help keep South Africa a diamond mining and beneficiating country for more generations than we might expect.”
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Contact:
Tom Tweedy 083 308 0083 [email protected]
Innocent Mabusela 083 399 7119 [email protected]
Lisa Brugmann DBSSSA 053 38387288 [email protected]