September 17th, 2005
De Beers has finally announced it is considering putting Koffiefontein, one of its oldest South African mines, up for sale after numerous hints earlier in the year.
Geologists describe Koffiefontein as a low grade mine with high quality stones, but the mine is not without problems.
The pipe is understood to have entered a different kimberlite area which is very low grade (carats per ton).
Any potential buyer would have to do a full study of the geology to fully estimate the potential of the mine. But there are other issues, such as the infrastructure and South Africa's new mining laws.
"De Beers is offering the mine as a going concern," said a geologist familiar with the mine. "It is located near a township, it will require a Black Economic Empowerment partner and under the new Diamond Amendment Bill the government will put a value on the goods," he said.
De Beers said it was unable to return Koffiefontein to profitability given the cost structures of the company. The mine has been operating at a loss since 2001.