Sourcing

The Company That Owns the Cullinan Mine Is Up for Sale

SourcingJun 30, 2020

The Company That Owns the Cullinan Mine Is Up for Sale

Petra Diamonds is looking for a buyer for some or all its assets.

Petra Diamonds recovered this 20.08-carat blue diamond from the Cullinan mine and sold it for almost $15 million last November. The London-based miner, which has three other diamond mines in addition to Cullinan, is up for sale.

London—Saddled with hundreds of millions of dollars in debt and facing a diamond market hobbled by COVID-19, miner Petra Diamonds has put itself up for sale.

The London-based company announced after market close Friday it is seeking a buyer for some or all its diamond mines.

Based in London, Petra Diamonds has a total of four operations: the Cullinan, Finsch and Koffiefontein mines in South Africa, and the open-pit Williamson, Tanzania’s only major diamond mine.

All four are former De Beers Group properties.

In operation since the early 1900s, Cullinan is known as a source of large Type IIa stones as well as blue diamonds and holds the distinction of producing the largest rough diamond ever recovered, the 3,106-carat Cullinan. (The mine, originally called Premier, was later renamed Cullinan in homage to the famous diamond.)

Petra, which has $650 million in outstanding 7.25 percent senior secured notes due for repayment in May 2022, began a strategic review in late March.

The company had problems prior to the spread of coronavirus, including weak diamond prices, troubles with its Williamson mine in Tanzania, and the debt incurred building a new processing plant at Cullinan and taking the Finsch mine underground.

The pandemic exacerbated its issues, dampening demand and causing prices to drop at its March sale.

In April, the company put Williamson on care and maintenance, citing “the unprecedented depressed market environment.”

The following month, the company reported sales were down 17 percent in its fiscal year-to-date due to weaker prices and lower sales in the March tender.

Petra said any companies with interest in buying some or all its mines should contact its advisors at Rothschild & Co., Giles Douglas (giles.douglas@rothschildandco.com) or Muhammad Jaffer (muhammad.jaffer@rothschildandco.com).

Michelle Graffis the editor-in-chief at National Jeweler, directing the publication’s coverage both online and in print.

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