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A diamond mine located in Sierra Leone is all set to be listed on the Hong Kong stock exchange. As per media reports, there will be an IPO for a diamond mine situated in the Koidu region of Sierra Leone. The diamond mine will be floated in Hong Kong in the latter half of the current year i.e. 2012. This is another listing in a series of luxury goods and diamond IPOs floated on the Hong Kong stock exchange designed to take advantage of the positive economic environment of the region.
The diamond mine will be listed in Asia by a privately held natural resources company known as the Benny Steinmetz Group. However, the listing will actually be done through a spinoff company which is named Octea. Octea is the holding company for the Koidu mine. The IPO being floated is expected to bring its holding company anything between 400 million American dollars and 600 million American dollars. The expected valuation of the diamond mine is somewhere in the range of 2 billion American dollars to 3 billion American dollars.
The Sierra Leone diamond mine, according to the Benny Steinmetz Group which is based in Geneva, is expected to have a production of around 500, 000 carats in the current year. It is also worth mentioning that the Koidu diamond mine has Tiffany and Company as one of its primary buyers. When the process for the public listing of the Sierra Leone diamond mine is complete, the Benny Steinmetz Group will become the first diamond miner to get a listing in Asia.
As mentioned earlier, the listing of this diamond mine on the Hong Kong stock exchange is a part of the ongoing trend in the world of companies listing in the Asian region. This series includes a series of international and regional retailers such as Graff Diamonds and Chow Tai Fook. It is also known publicly that the Russian diamond mining agent Alrosa is also in the process of listing on the Hong Kong stock exchange. The proceeds from the public listing are touted to be used for the development of the Koidu Diamond Mine. Octea’s long term plans for the Sierra Leone Diamond mine is to produce around 2.5 million carats in the future.
In addition to this, Canadian luxury retailer Harry Winston and diamond dealer Martin Rapaport are also expected to float their respective public offerings. Harry Winston is a luxury retailer that has a 40 percent share in the Canadian Diavik Diamond Mine which is located in the Northwest Territories of the country. Harry Winston is also known for gifting a special set of diamond cufflinks and brooch to the Duke and Duchess of Cambridge. Similarly, Martin Rapaport is a diamond dealer that is known for its Rap Diamond Price List.
Sierra Leone - 1985 (Photo credit: Brian Harrington Spier)
While the listing of the Koidu diamond mine shows the rising importance of the Asian region to the luxury goods market, it also reflects the changing international mindset with regard to the diamond industries of the African region. The fact that Tiffany and Co is a major buyer of the Sierra Leone Diamond Mine shows a concerted effort on the part of the developed world to bring African diamond industries into the main stream.
Another example of this concerted effort is that, recently, a ban on diamond sales from the Zimbabwean Marange Diamond Fields was lifted by the Kimberley Process, despite protests from human rights group like Global Witness. The idea behind the efforts to bring the African diamond industries into the main stream is to help the downtrodden countries economically.
The Benny Steinmetz Group is run by a foundation but the Steinmetz family which has been a major player in the global diamond industry for decades plays the role of special advisers. Furthermore, the Benny Steinmetz Group is also De Beers’ biggest customer when it comes to rough diamonds. The Group cuts and polishes the diamonds before selling them to jewelry manufacturers. The Benny Steinmetz Group also has interests in other industries such as iron ore and oil and gas