De Beers: “We Are Diamonds”
De Beers is prepared for excellent production and consistency under the management of Anglo American beginning in Q3 2012.
Speaking at the Gordon Institute of Business Science on Tuesday, De Beers CEO Philippe Mellier said it would be business as usual for the diamond miner once Anglo American’s $5.1bn take-out of the Oppenheimer family’s 40% stake in the company has been finalised; a transaction that would also bring the firm under the management control of Anglo.
“It’s an issue we’ve discussed a lot internally,” De Beers CEO Philippe Mellier said. “Anglo American has been clear from the very beginning that we are not a commodity and cannot be treated or managed like an iron ore division, or copper division, or platinum division.
“We are diamonds. We are in the luxury business.”
With its joint venture partners, De Beers operates in more than 20 countries across six continents and generates about 35% (by value) of global rough diamond production from its operations in South Africa, Botswana, Namibia and Canada. It has widespread exploration activities and unrivalled diamond distribution, sales and marketing operations.
De Beers holds a 50% interest in the Debswana Diamond Company and in Namdeb Holdings, owned jointly with the Government of the Republic of Botswana (GRB) and the Government of the Republic of Namibia (GRN) respectively. Namdeb Holdings owns 100% each of Namdeb (land mining) and De Beers Marine Namibia (marine mining).
In addition, De Beers has a 74% shareholding in South African-based De Beers Consolidated Mines Limited, with the Ponahalo group, a broad based black economic empowerment consortium, holding the balance.
De Beers owns 100% of De Beers Canada, which operates the company’s first two mines outside of Africa.
The Diamond Trading Company
De Beers owns 100% of The Diamond Trading Company (DTC), the sales and rough diamonds distribution arm of De Beers. It also has a 50% interest with the GRB in Diamond Trading Company Botswana and a 50% ownership, along with the GRN’s matching shareholding, in Namibia Diamond Trading Company.
De Beers and Moët Hennessy Louis Vuitton
De Beers and Moët Hennessy Louis Vuitton have established a high-end retail jewellery joint venture, through De Beers Diamond Jewellers, with stores in the most fashionable areas of some of the world’s great cities, including New York, Los Angeles, London, Paris, Tokyo and Dubai.
De Beers CEO Philippe Mellier said the company’s board structure would remain in place to accommodate the government of Botswana’s 15% shareholding in De Beers. Botswana has an option to increase this stake to 25% once the Oppenheimer deal closes.
“Obviously we’ll share some support functions with Anglo that will lower our costs, which is good,” said De Beers CEO Philippe Mellier.
“We’re going to tap on their mining expertise, and their exploration expertise, because they’re very strong and much bigger than us in mining.
“But for the rest of the business – luxury [sales], polished diamonds, marketing, distribution of rough diamonds – we are totally different.”
Mellier said De Beers has been working with Anglo’s management for the past six months and described the relationship as “excellent”.
“The first thing we hear when we meet is we’re not a commodity; we are different.
“We need to do well, for sure. But Anglo will take good care of us. And they have a very deep pocket, which is also good.”
Source: [ miningmx.com ]
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Posted by WoodlawnPost
on May 31 2012. Filed under Diamonds, Investments.
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