Anglo to increase stake in De Beers

Business
Global miner Anglo-American has agreed to buy the Oppenheimer family’s stake in diamond miner De Beers for US$5,1 billion in cash, taking its ownership of the diamond miner to up to 85%, it said on Friday.

Anglo-American has long been speculated to be considering a deal to increase its stake in unlisted De Beers, which vies with Russia’s Alrosa for the title of the world’s largest diamond producer, from the current 45%, but Friday’s announcement was unexpected.

 

“Today’s announcement marks our commitment to an industry with highly attractive long-term supply and demand fundamentals,” Anglo-American Chief Executive Cynthia Carroll said.

“Underpinned by the security of supply offered by a new 10-year sales agreement with our partner, the Government of the Republic of Botswana, this forms a compelling proposition.”

Anglo-American said it had reached a deal with the CHL Group, which represents the Oppenheimer family interest, but added Botswana had a pre-emption right over the CHL stake, potentially lifting the government’s ownership to up to 25%.

 

Anglo said that if Botswana exercised its rights in full, it would raise its own interest in De Beers to 75%.

 

De Beers, founded by Cecil Rhodes in the 19th century, controls about 40% of the world’s rough diamond supply.

 

Meanwhile, shares of South Africa’s Tongaat Hulett hit a 3-month high after the agri-processing company says it expects sugar production for the 2011/12 crop to increase by about 14% from 1 million tonnes produced a year earlier.

 

Tongaat has interests in land management and property development, but its main business is sugar production and milling. —AFP