By Charles Wyndham.
My stomach has just about got over the chicken pie, but I am not so sure that my mind has got over the combination of the De Beers results, Nchindo’s death and Anglo putting diamonds after ‘thermal coal’ in its results.
The De Beers results fell pretty flat, as there had been so much fun speculation that there would be an announcement of a listing and significant management changes to accompany the turgid numbers.
The eulogies to David Noko, MD of DBCM, were overwhelming in their support for failure and came sometime after the results.
It was Noko, who when he was appointed to the job of MD of DBCM said that all nine (I hope I have got that number right but it is pretty irrelevant, more of nothing is still nothing) De Beers’ mines in South Africa were going to be profitable, at the time I think at most two were.
Well, his success is that there are no longer nine mines in the De Beers stable and all the remaining are down the tubes, in fact the only two seemingly profitable mines are those that they sold, Koffiefontein and Cullinan.
Another billion dollars being thrown in by the shareholders, in itself pretty remarkable that they feel comfortable investing in this old hulk, is small change required to what is needed to keep the rusty old ship afloat.
Rumours of a listing are persisting and, perhaps, with some reason.
It is only a float that offers any chance for the Oppenheimer’s to avoid getting their feet wet and reaching dry land.
A big dollop of cash for excitingly valued assets to pay off the shareholders would allow a stately exit for the O’s.
The funny thing of course is that it will be the reverse of what was done for privatisation and I will be fascinated to compare the various valuations for those few assets still lying around.
The exception to this is Canada.
Snap has been pretty much written off ($1.6 billion) and that leaves Victor, which is simply not big enough to make that much of a difference to anything except some lost moose.
South Africa, now that Venetia has been consigned to the rubbish bin of incompetent management, is zero, whatever hype might be tried on with Finsch.
Namibia is disappearing beneath the waves.
What the hell is left?
Good old Botswana.
No doubt De Beers is telling Government just what a poor return there is for any investment in these mature assets; and, then no doubt, they will be singing the praises of all these wonderful Botswana assets when they come to list.
The fact is that the glory days for Debswana’s mines are over which is not to say that they are not sound assets, but that extraordinary profitability, that at one time made Jwaneng the most profitable mine of any commodity, is never going to return.
It was this chameleon behaviour around privatisation compared to the Black Empowerment deal in South Africa that appeared to leave everything looking like a bed of roses.
Well, they are certainly left with the thorns, as others have pointed out recently.
The revelations that have occurred around the Nchindo affair are deeply revealing as to the extent of De Beers entrenched interests in the country.
It is, I suppose, not that surprising that Penny should take up the role of Chairman of Debswana in what is such a critical year with the renegotiation of the marketing contract.
The Chairmanship goes in rotation though Penny passed up last time to allow the then Botswanan Chairman to continue for another year or so, timing is everything.
All I can say is that I personally will not be at the front of the queue for any De Beers’ bits of paper they may choose to kindly offer to Joe Public.
Let us hope they stick to arranging ‘Love Balls’, but then I might not get an invitation, again.