De Beers Sells Iron Ore Royalty Right for $150m
July 22, 24(IDEX Online) - Loss-making De Beers is selling off an iron ore royalty right in Australia for $150m as it seeks to streamline its operations.
The right is a throwback to the early 1980s when it went exploring for diamonds, but found an iron ore deposit instead.
De Beers today (22 July) said it had agreed to sell its royalty right at the Onslow Iron project, in West Pilbara, to the global mining and metals investment firm Taurus Funds Management.
The project is joint venture between a number of partners, notably Mineral Resources (MinRes) which holds a 40 per cent stake and is the primary developer.
It will receive an upfront cash consideration of $125m and up to $25m of deferred consideration for the non-core asset.
Last December Duncan Wanblad, CEO of parent company Anglo American, said his focus to streamline De Beers and reduce annual overheads by $100m. De Beers made a loss in the second half of last year amid ongoing weak demand.
De Beers Group CEO Al Cook said in a statement: "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."
Pic, courtesy Mineral Resources shows the Onslow Iron project