Home > Mining Week > Mining Week 45/’11: Anglo takes control of De Beers

Mining Week 45/’11: Anglo takes control of De Beers

November 6, 2011

Top Stories of the Week:

  • Anglo American adds 40% to its 45% stake of De Beers to gain control
    • Anglo American agreed to pay $5.1bln to the Oppenheimer family to gain control of diamond miner De Beers. The other 15% are owned by the government of Botswana. De Beers changed CEO in May of this year and tried to strengthen partnerships and simplify the ownership structure.
    • Sources: Anglo American press release; Wall Street Journal
  • China: 8 die, 45 rescued in coal mine disaster
    • A blast in a state-owned underground coal mine killed eight miners. 45 miners that were initially trapped underground were rescued within two days via a rapidly excavated tunnel.
    • Sources: AFP; Wall Street Journal

Trends & Implications:

  • Diamonds already accounted for 11% of Anglo American’s revenues, and will get close to 20% now. The simplified ownership structure will help De Beers to undertake the large investments in both new project development and modernization of current operations required to retain its leadership position in the global diamond business. Additionally, Anglo Americans global footprint will help De Beers to diversify its production footprint, which is still heavily skewed towards Botswana.
  • Safety in Chinese mines is still far below Western standards, but under pressure of federal regulation the situation is improving rapidly. Unsafe mines are often forced to close temporarily, and rescue teams are becoming better equipped to safe the lives of trapped miners. Official numbers show a 2/3 decrease of fatalities in the past 10 years. However,the surge of coal demand in the country is putting the safety improvements under pressure, as mine management is willing to go a long way to increase output.

©2011 | Wilfred Visser | thebusinessofmining.com