Petra Diamonds (LON:PDL) has moved closer to completing its acquisition of the Finsch diamond mine from De Beers, as the deal was granted ministerial consent from the South African government.
The company has now been cleared to transfer the Finsch mine’s new order mining right from De Beers Consolidated Mines Ltd to Afropean Diamonds Ltd – which is 74 per cent owned by Petra.
In January Petra agreed the US$210 million deal to buy the mine, which is South Africa’s second largest diamond mine by production.
"We are delighted to have received the Section 11 Ministerial consent,” said chief executive Johan Dippenaar. “The acquisition process is now in the very final stages and we expect it to complete in the near future.
“Petra will then take over management of this major producing diamond mine which, after an initial three month bedding down period, is expected to add approximately 125,000 carats per month to Petra's production."
Yuen Low, analyst at City firm Shore Capital, reckons the granting of ministerial consent all but completes the deal. “All that remains is for the registration of the transfer; Petra intends to publish a Finsch resource statement when this has been completed,” Low said in a note to clients.
“Whilst today’s news represents the completion of a major hurdle, we believe it is already in the share price and consequently do not expect a significant impact.”