De Beers Consolidated Mines said it will sell Cullinan Diamond Mine as a going concern to the Petra Diamonds Cullinan Consortium for a cash payment of 1 billion rand ($147.5 million) in cash.

PDCC is comprised of Petra Diamonds Ltd. Al Rajhi Holdings WLL (a Saudi-based investment company), and their empowerment partner, Thembinkosi Mining—whose shareholders include Sedibeng Mining (Pty) Ltd, Namoise Mining (Pty) Ltd, Umnotho weSizwe Group (Pty) Ltd, and a Petra Employee Share Trust.

“We believe that Petra’s track record as a hardrock underground miner bodes well for the long-term sustainability of Cullinan Diamond Mine going forward, and are confident that this will help ensure a long-term opportunity for the Petra-led consortium as the new owners of the mine, as well as guarantee continued investment in the town of Cullinan for many years to come,” said David Noko, managing director of DBCM

Petra has already purchased the Dancarl Mine in the Barkley West District and Koffiefontein Mine from DBCM. It also reached an agreement with DBCM to purchase the company’s Kimberley underground mines in September 2007, which the parties hope to finalise by early 2008.

The sale of Cullinan Diamond Mine reflects De Beers’ continued realignment of its mining portfolio and a global business model that no longer focuses on maximizing market share of production, DBCM said in a statement. Taken together with the previous announcements regarding Namaqualand Mines and the Kimberley mining operations this completes DBCM’s portfolio review process.

“De Beers is strengthening its commercial future in South Africa whilst helping to meet Government’s aspirations for a diversified, transformed South African diamond industry,” said Gareth Penny, De Beers Group managing director.

Adonis Pouroulis, chairman Petra Diamonds and 
Gareth Penny, De Beers managing director at signing.

JCK