Petra and Ekapa Acquire De Beers Oldest Diamond Mine

UK's Petra Diamond Ltd partners with South African's Ekapa Minerals Pty to buy the oldest mines of De Beers in South Africa.

According to Reuters, Petra Diamonds Ltd and South African's Ekapa Minerals would buy De Beers' Kimberley mines for 102 million rand ($7.1 million). In last May, De Beers announced that it put the mining operations in Kimberley on sale.

Kimberley mines is located in the Northern Cape Province of South Africa. In 1871, a discovery of 83.5 carat diamond near a farm belong to De Beers family started a new rush. Huge wave of people had migrated to surrounding area near Orange River in search for diamonds.

Later in 1888, several mines leader decided to integrate their mining activities, and created a consolidated company. Hence De Beers Consolidated Mines Limited began with mines in Kimberley as its center of operation.

Bloomberg reported that the purchase of Kimberley Mines has ended De Beers' 127-year control of the operation, that was the catalyst for the modern diamond industry. Petra and Ekapa will pay $7.2 million to De Beers. Petra own 49.9% of the project while Ekapa that manage the operation owns 50.1%.

Kimberley Mines is the second largest source for De Beers after Venetia mining in Limpopo province, South Africa. Last year, Kimberley Mines produced 722,000 carats of diamonds. Petra and Ekapa expect to produce 700,000 carats diamond a year and generating annual revenue of $65 million for the next three years.

Petra Diamonds are producing diamond in its mines located in South Africa, Tanzania and Botswana. Founded in 1997, the company has unique business model in expanding its business operations; by acquiring De Beers old diamond mines. Petra has already purchased five mines in South Africa and Tanzania.

According to Bloomberg, Petra has bought three most important diamond mines: Finsch, Koffiefontein and Cullinan Mines from De Beers. Petra bought Cullinan Mines in 2007, which is famous for its Cullinan diamond, the largest rough unpolished diamond. The diamond that was found in 1905 had original weigh at 3,106.75 carats.

According to Diamonds.Net, the mineral resources at Kimberley contain about 11 carats per hundred tonnes for the first three years of operations. Jahn Hohne, Ekapa Minerals CEO said, "The most compelling aspect of this transaction is the extension of the mining and processing of Kimberley's tailings mineral resources far into the future."

Ekapa will finance a working capital of $14 million to run the mining operation in Kimberley. It also includes managing a treatment plant with 6 million tonnes of capacity per year, that is capable of processing a range of ore sources.