After obtaining the green light from South Africa’s Department of Mineral Resources and Energy, Stargems Group, a prominent player in diamond sourcing and supply, is poised to assume control over operations at the Koffiefontein diamond mine. In a deal structured differently from traditional transactions, Stargems will offer Petra, the current operator, a nominal cash consideration while undertaking all environmental rehabilitation liabilities and care and maintenance costs for the site. Notably, Petra had previously expended $23.1 million towards these expenses during the first half of the year.
Richard Duffy, CEO of Petra, expressed contentment with the sale agreement, highlighting Petra’s commitment to a responsible exit strategy. Duffy conveyed confidence in Stargems’ capabilities, citing their blend of technical proficiency and financial robustness, essential for the responsible management of the mine and the continuity of economic activities in the region. Furthermore, the transaction is expected to generate savings for Petra, estimated to range between $15 million to $18 million in closure-related expenses.
This latest acquisition marks Stargems’ expansion strategy, building upon its acquisition of two other South African diamond mines, Jagersfontein Holdings and Rooipoort Holdings, from Reinet Investments in 2022. This strategic maneuver underscores Stargems’ concerted efforts to fortify its foothold across the diamond supply chain, positioning itself as a key player in the industry’s landscape.
