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De Beers puts Kimberley diamond mines up for sale

London - Diamond miner De Beers Group said it was putting its Kimberley Mines up for sale as the operation no longer fits the company's strategic plan.

De Beers said it hoped to conclude the sale process "in a matter of months".

The company, which has been mining at Kimberley for more than a century, said it had invested in the mine to 2018 and that the new owners would need only stay-in-business capital, potentially extending life of the mine to 2030.

De Beers, Anglo American's second-most profitable unit, produced 722 000 carats of diamonds at Kimberley in 2014.

Anglo American [JSE:AGL] said last month that it planned to cut diamond production this year in response to lower prices, as diamond demand has slowed since late 2014 due to middlemen who buy rough stones struggling with a stronger dollar and liquidity problems.

Botswana move

In 2011 a decision was made to move the whole of the company's sales operation - 85 out of 300 London-based De Beers employees to Gaborone in Botwana, according to a 2013 Reuters report.

The move will cost more than $120m, and follows years of negotiations between De Beers and Botswana, the largest producer of gem diamonds and home to mines like Jwaneng, the world's richest.

The move secured a new 10-year contract for the sorting, valuing and sales of diamonds from the Botswana mines run by Debswana, a 50:50 joint venture between De Beers and the Botswana government - the longest sales contract agreed to date between the two sides.

It will shift more than $6bn of annual rough diamond sales from an international financial centre to a comparative backwater with a population of 230 000, in one of the most dramatic examples of a producing country battling successfully to keep value and profits from the raw materials at home.

By separating sales from corporate headquarters, the move is also arguably the biggest challenge De Beers has faced to the way it does business since the current sales model was set up nearly a century ago to secure its then-dominant position.

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