|
Article Excerpt
Original Source: FD (FAIR DISCLOSURE) WIRE
STEPHEN LUSSIER, DIRECTOR OF EXTERNAL AND CORPORATE AFFAIRS, DE BEERS CONSOLIDATED MINES LIMITED: Good afternoon ladies and gentlemen, or perhaps good morning to those who are dialing in from a different part of the world, where it's a bit earlier. I'm Stephen Lussier, the Director of External and Corporate Affairs for De Beers, and I just really want to get us started and lead us through the program.
You should all have a pack with various bits of materials in it. If you don't have that pack, put your hand up, and we'll make sure you get one before we start. For those of you on the teleconference, you'll be able to follow the slides from the presentation on the webcast. There will be a short delay of a couple of seconds, but hopefully they'll be pretty punctual, and you can keep up there.
The order for today, first for about a 20 minute presentation. We'll hear first from -- I hope from Nicky Oppenheimer, who's not with us here in Johannesburg today, but in Cape Town where he was, as you will see in your pack, just literally in the last hour, signing an agreement with the Minister, which he will touch on. He couldn't make it back in an hour, so he's going to try to address us directly from Cape Town. Then Stuart Brown will take us through the financials, and Gareth Penny, the MD, on the operational highlights.
After that, we'll have about 20 to 25 minutes for questions, both from those here in the audience in Johannesburg, as well as those on the phone lines. So hopefully let's begin with Nicky Oppenheimer from Cape Town. Nicky, can you hear us?
NICKY OPPENHEIMER, CHAIRMAN, DE BEERS CONSOLIDATED MINES LIMITED: Can you hear me okay?
STEPHEN LUSSIER: We can't hear. We can hear you only very faintly, I'm afraid. Hold on a second.
NICKY OPPENHEIMER: One second, we'll try and -- can you hear me now?
STEPHEN LUSSIER: We would like to hear you a bit louder. If you give us 30 seconds, we'll see if we can't get the volume up.
NICKY OPPENHEIMER: Okay.
STEPHEN LUSSIER: Otherwise we'll have to listen really carefully.
NICKY OPPENHEIMER: We can hear you fine this end, if that's any consolation.
STEPHEN LUSSIER: Let's just give it 30 seconds, and then I think Nicky, we'll probably ask you to charge on. You're faint, but you are discernible.
NICKY OPPENHEIMER: Is it any better now?
STEPHEN LUSSIER: Oh, that's much better. Let's start.
NICKY OPPENHEIMER: Okay, great. Stephen, have you been through the introduction, have you?
STEPHEN LUSSIER: I have, indeed, yes. We're ready for you to get going.
NICKY OPPENHEIMER: Great. Well, ladies and gentlemen, welcome to this results meeting for De Beers SA. I must apologize for not being with you, but as I'm sure Stephen has told you, I'm down in Cape Town, where I listened to the President making his state of the nation address, and then more importantly, from the De Beers perspective, signed what I think is a very important agreement with the DME, with the Minister today, in relation to the Namaqualand, our mines on the west coast, and I hope that press release is with you all.
The essence of the deal is that we've reached an agreement with the Ministry to put together De Beers' assets on the west coast and Alexkor, and put these together in a new, stand-alone, independently managed diamond mining company. We think this is an important deal, and a deal that will be beneficial to both the government and to De Beers, and that the assets that are put together will, in their amalgamated form, be able to deliver greater returns to shareholders than they would in their individual case.
As a start of this process, and it's obviously one part of the process of this amalgamation, we will be intending to transfer 20% of Namaqualand mines to the DME, and a subsidiary matter, which is covered in the agreement as well, is De Beers is going to help government facilitate the start up of the State Diamond Trader.
It's again something we think is very important, because it actually requires very considerable skills to run a traded diamond trading company, which this will be, and over a three year period, De Beers will be looking to run this company with all the necessary firewalls in place, so that no information gets into the wrong hands and allow a transfer of assets -- I mean, of skills.
I think just before I move on to the next slide I should say that I would like to pay a particular compliment in this process, and this agreement, to our Ponahalo partners, particularly Manne Dipico and Barend Petersen, who have really led this process, and I think we're seeing here what one wants to see in a BEE transaction, the new shareholders bringing real value to De Beers, and I think this is a good example for the rest of the mining industry.
If we can move to my next slide, which simply highlights the various financials which Stuart will talk through in much more detail. Obviously, you see diamond sales down, influenced by the fact that we've had fewer Russian diamonds to sell, and also the difficult market in which we've been operating throughout the year, resulting in own earnings, a particular [foible] of mine, a figure I particularly like, well down on last year, and as a result of that, obviously the return to the shareholders being very much down, dividends being halved, and at the same time, gearing increasing.
But what I like about these figures is it shows De Beers investing in the future, and expansion capital, as you see, up at just under $950m, and De Beers is, at the moment, building four new mines, something it's most probably never done in its history before, and I think very exciting for the future. And if we can go to the next slide, just -- it's an important thing in De Beers, and we have a saying, up at the top of that slide, of living up to diamonds.
It's something that we think is particularly important, and is a fantastic constraint on De Beers' behavior, and in living up to diamonds, obviously our partnerships, and how those work, are particularly important. The Ponahalo BEE deal was done at the beginning of 2006, a very important deal, and I think, innovative deal, and again, referring back to the agreement we've just signed, one can see how those new shareholders are bringing value. They're not just there to tick a box. They're there to make De Beers Consolidated Mines a better company, and they are really contributing there.
Importantly, obviously, the extension of the Jwaneng mining lease, which is being applied simultaneously over all the Botswana mines, and the new sales agreement in Namibia, which again cements the relationships there.
And then really building out the ethics, it's just really so important to him that he is again living up to diamonds, and as my grandfather said all those years ago, De Beers wants to do more than just make money. It wants to make money in an ethical and proper way, and that's really important to us, because we believe that diamonds, throughout Africa and elsewhere in the world, can really contribute to the development of the continent as a whole.
Very importantly, the Kimberley Process, I think that's a very important process in a time of conflict diamonds, and what I like about the Kimberley Process is that it is working, not perfect, needs continuous work. But the great thing about the Kimberley Process is that it is an African success story, and I think that's tremendous. And governments in the southern African region, De Beers, and the NGOs have all contributed, and must go on contributing to making that an ongoing success.
And lastly, obviously, we are committed to the environment, and to the communities in which we operate. I'll just mention two things which I think are important. The first is the opening, or reopening, I should say, of the Kimberley Big Hole Museum where I was actually there earlier this week. It's a fantastic environment, and a great asset for Kimberley and the northern Cape. I encourage everybody to go and visit it. And secondly, obviously De Beers' ongoing work on HIV and AIDS, where we remain committed to doing the right thing for our employees and their spouses.
And then lastly, you will, I think, have in front of you, those people in Johannesburg, De Beers' Report to Society, which is an important document. It's a rather big tome, I have to say, but it lays out De Beers for everybody to look at and examine, and we're very happy to have people run their magnifying glasses over us. And I think what I like about the Report to Society, it reveals a company which I'm proud of, and I hope everybody who works at De Beers is proud of, and I believe if anybody could see this, anybody would be proud of the company.
For those...
|
