De Beers has entered into a definitive agreement to sell an iron ore royalty right related to the Onslow Iron project in West Pilbara, Australia.
This is part of the group’s focus on streamlining the business and divesting non-core assets to support its Origins strategy.
It said Taurus Funds Management will acquire the subsidiary company, De Beers Exploration Australia, that owns the royalty for an upfront cash consideration of $125 million and up to $25 million of deferred consideration.
The sale is expected to close in the fourth quarter of 2024, pending customary closing conditions.
“As part of our Origins Strategy, we committed to streamlining the De Beers business. We have already seen significant progress in reducing our overhead costs by reshaping our workforce in support of the new strategy, and the sale of this royalty right continues the process of business streamlining as we exit this non-core asset at the right time and for value,” said De Beers chief executive Al Cook.
“With a simpler and more efficient corporate structure, we will sharpen our focus on our core business of producing the world’s most beautiful natural diamonds and bringing them to market through the most value-adding channels.”
De Beers’ ownership of the iron ore royalty right results from its historical global exploration activities. While the group did not discover any economically viable diamond deposits in Australia as a result of its exploration programme, its exploration ground did contain an iron ore deposit, and that ground was subsequently sold for cash and a royalty right.
Mathew Nyaungwa, Editor in Chief of the African Bureau, Rough&Polished
