While the TMRs contain considerable value, some of the TMRs cannot be profitably processed by Kimberley mines due to its current overhead cost structure and have therefore not been included in the mine’s long-term production plan.

DBCM believes that the sale of the TMRs to a suitable party with a different cost structure may be able to unlock this value. The company said it also believes that the disposal could create additional employment opportunities and hence facilitate social upliftment in the Kimberley region, which remains one of the strategic goals for De Beers.

The Small Miners Forum was selected as the preferred bidder based on their strong empowerment credentials, their local (Northern Cape) participation and their technical ability in addition to the financial value of their offer. “It is gratifying that De Beers recognizes and values the working relationship it has with the four small miners that make up the Small Miners Forum,” said John Hohne, representing SMF.

“We are delighted that, following a rigorous selection process, a group of local Kimberley companies presently engaged in mining the TMRs have been selected as the successful bidder by De Beers to mine the TMRs for our own account,” Hohne said. “We are particularly happy that the deal exposes us to the rough diamond market for the first time and allows for further beneficiating opportunities.”

In terms of the agreement the SMF will assume the associated environmental rehabilitation liabilities for the TMRs, which is estimated to be in the order of R26 million. The SMF will pay R0.68mt of material with the total tonnage under consideration about 14.5 million of tailings and 745 000 mt of stockpile as of August 15, 2007. This amount will, however, diminish due to contractor mining prior to the closing of the transaction. The SMF will additionally pay R1 in total for an additional, specific separate resource consisting of approximately 43.5 million mt of tailings.

“We believe that there are opportunities for other players to take advantage of those assets that may not have a strategic fit with what we are doing,” said David Noko, Managing Director, DBCM. “This announcement reflects our desire to facilitate the broader sustainable ownership of diamond resources in the Kimberley area. I am particularly pleased that we have been able to conclude this transaction with local Northern Cape-based entrepreneurs.”

De Beers is implementing a R2.2 billion capital investment program in building new mines in South Africa, including SASA (South African Sea Areas) and Voorspoed Mine in the Free State. Other capital investments include significant investment in its world class assets, Finsch and Venetia Mines, as well as funding of new exploration activities to find the diamond mines of the future in South Africa.