Petra Diamonds and its empowerment partners have decided to sell its fissure mine operations‚ consisting of the Helam‚ Sedibeng and Star mines in SA.
Following the 2005 merger of Petra with Crown Diamonds - which previously operated the fissure mines - the group embarked on a strategy of growing its production through the acquisition of several high-tonnage‚ long-life kimberlite pipe operations: Cullinan‚ Finsch‚ Koffiefontein‚ Williamson and Kimberley Underground.
Petra said on Tuesday that this strategy had significantly increased its resource base‚ production and revenue‚ and had put it in the position of targeting‚ without further acquisitions‚ an increase in production from 2.2 million carats in full-year 2012 to more than 5 million carats in full-year 2019.
Through Petra’s focus on the development of its major assets‚ it had evolved into a successful producer from underground and surface (Williamson)‚ high-tonnage kimberlite pipe mines‚ it said. The fissure mines had therefore become noncore in terms of both their revenues and their resource base.
Petra says the mines could deliver strong returns for an operator to whom they would be core assets.
Helam‚ Sedibeng and Star are all well-established fissure mines which have been in operation for more than 50 years. Full shrinkage overhand stoping is employed at Helam and Sedibeng‚ while underhand open stoping is employed at Star.
The average value per carat of the fissure mines is high for kimberlite operations‚ ranging across the fissures from US$150 to US$500 per carat in FY 2012‚ with an FY 2012 average of US$255 per carat. That compares with a global average of US$90 per carat.
Petra holds a 74% interest in Helam (an empowerment partner holds 26%); a 74.5% interest in Sedibeng (BEE partners 25.5%); and a 74% interest in Star (BEE partner 26%).
Potential transactions arising from the sale process will be subject to detailed scrutiny and‚ apart from financial objectives‚ Petra would consider prospective purchasers’ approach to employment‚ health and safety‚ environmental management and other issues fundamental to the long-term success of the fissure mines for all stakeholders‚ it said.
“The fissure mines were Petra’s first producing mines when acquired further to the Crown Diamonds merger in 2005‚ but given Petra’s development and growth over recent years‚ the fissure mines are no longer core to the group. Petra’s management teams is focusing its attention on the group’s major assets‚ as it is from these that production growth to over 5 million carats per annum by FY 2019 will be delivered‚” Petra Diamonds CEO Johan Dippenaar said.
The sale process will start shortly. - I-Net Bridge