Petra Buys Finsch

Petra is one of the largest independent diamond mining groups and supplies the world with rough diamonds. Their recent purchase of the Finsch mine in South Africa for $132 million will increase their output and overall visibility in the diamond industry. Diamond-mining company diversification is good for the region as well, so this purchase can only help that cause.

The Finsch mine was originally established in 1961 by the DeBeers diamond company. They have built the mine up well over the years and have amassed a great workforce and created a strong infrastructure. The sale will give DeBeers extra capital to expand their other operations in the region and will be used for the commercial side as well to increase their sales and strengthen their business.

DeBeers went through a rigorous process in order to find the right company to buy the mine. Key factors examined included the company’s technical prowess, BBE credentials, socio-economic focus and their overall track record in South Africa. The goal of all diamond mining companies is investment in the mining area and the continued empowerment of workers, so that was the focus for DeBeers in making their choice.

Petra owns a total of seven mines in South Africa with this acquisition and has a 1.1 million carat output per year. With the addition of the Finsch mine, they hope to get up to 2.5 million carats per year by 2014. Their ultimate goal is to hit 3 million carats per year by 2019 and have an 18 year mine plan formulated for the future.

With the addition of the diamonds previously mined at Finsch, Petra will have a total of about 300 million carats in reserve, worth $56 billion. Price estimates for both run of mine goods and tailing output has been increased to fall in line with current rough diamond prices as well. The future is as bright and clear as a diamond for Petra with this latest addition, so expect good things from them in the near future.