De Beers, Trans Hex in talks on diamond mining operations

Leading diamond mining and sales group De Beers has started discussions with Trans Hex on Namaqualand Mines as the group is concentrating on high-return, mega diamond mines.

JOHANNESBURG  - 

World No. 1 diamond miner De Beers and junior diamond miner Trans Hex (JSE:TSX) have started formal discussions around Namaqualand Mines on the West Coast of South Africa that might see Trans Hex buying, or taking a stake in, the alluvial properties which are expected to produce 330,000 carats this year.

 De Beers spokesperson Tom Tweedy said today De Beers announced in February last year that it planned to divest from the smaller scale but commercially viable producer in future. The company was concentrating its efforts on very high-return, mega mines.

 Tweedy said the renowned diamond group was approached by Trans Hex, which has operated smaller mines before and had black economic empowerment credentials. De Beers was not only a mining company, but an integrated business from exploration to retail and employed a different strategy to look at assets.

 "We have had deep discussions with the unions already and we are prepared to move forward on this matter," said Tweedy. The formal discussions that have started between the two companies means that Trans Hex gains access to the Namqualand Mines property with a view to taking an interest in it.

 De Beers has long felt that there are synergies between the various diamond assets on the West Coast and supports consolidation between diamond assets in the region. The company would not be involved in the consolidation but would keep its commitments to environmental and other projects in the region.

 The diamond group sees the latest discussions with Trans Hex as another step in its contribution to transformation and broadening the ownership base of the diamond mining sector in South Africa.

 "The company is looking at opportunities for empowerment when reviewing its portfolio of operating mines. In the past few years mines such as Koffiefontein and Cullinan mine have been transferred to consortia with broad empowerment credentials, which include women, communities and black empowerment groups."

 The diamond miner issued 20% of Namaqualand Mines to the department of minerals and energy when it amalgamated the company into a standalone entity in 2007.

 De Beers Namaqualand Mines are situated along a 250 km long stretch of the Atlantic Coast of South Africa, according to website Minelife.

 It says Namaqualand Mines' diamonds are concentrated in alluvial or ‘placer' deposits comprising old gravel beaches and river channels. The highest concentrations of the diamonds are located at the base of these features, at depths of up to 100 metres below surface, although mining has only ventured 40 metres down since its inception in 1928.

 The occurrence of diamonds in this setting is primarily a consequence of the break-up of the ancient super-continent of Gondwanaland, which split to form Africa and South America some 130 million years ago.

 As the two landmasses moved apart, numerous river systems along the southern African margin drained westward, bringing with them huge quantities of diamond weathered out from kimberlite deposits located in the hinterland hundreds of kilometres to the east.

 All of the diamonds found here are of gem quality, with some 31 million carats having been produced by the turn of the 20th century.

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