Anglo-American presence to build up

Anglo-American diamond presence to build up after Oppenheimer retreat
Rarely is such an era ended abruptly as the Oppenheimer earlier this
month in South Africa. For nearly 100 years, the richest family of the
Cape Republic until last week the world's largest diamonds, De Beers
had dominated sponsors.

Nicky Oppenheimer (left) President Hifikepunye Pohamba has paid a
visit on Friday in the state house to the head of state, the new chief
executive of the De Beers diamond company, Philippe Mellier, imagine.
Oppenheimer will remain until the final closing of the transaction of
shares in Anglo American in the second half of 2012, Chairman of the
De Beers group.
At its peak, the company dominated by its cartel sales almost 90
percent of world trade in rough diamonds - and their pricing. With the
now completed sale of its 40% interest in the few years ago, still
closely interwoven with De Beers mining group Anglo American, the
strong influence that the family had for decades on the economic life
of the Cape, is extinguished at a stroke. A comeback is unlikely.

The big winner of the 5.1 billion-dollar buyout is Anglo American -
in 1917 by Ernest (Ernst) Oppenheimer on the gold fields of
Johannesburg established mining house where the family of the founder
is now only involved with just under two percent. Should the takeover
take all the regulatory hurdles step, would Anglo American's existing
stake in De Beers to increase from 45 percent to 85 percent. The
remaining 15 percent are held by the government of the diamond-rich
Botswana desert state, which has a right of first refusal and could
increase its share in the exercise to 25 percent, which is considered
likely. In this case, the proportion of Anglo American, De Beers would
rise to only 75 percent of it. The purchase price would be reduced
proportionately.

Even if Anglo American might in the end buy the entire 40 percent,
the company would have to take it any additional capital. In addition
to $ 2.2 billion in cash, the company has a previously untapped
opportunity for borrowings. Another plus point for Anglo American is
that the acquisition would immediately be reflected in its balance
sheet.

Currently, the diamond market by most observers is evaluated very
positively. "De Beers is a unique company with a dominant market
position in a lucrative industry," writes about the Bank of America
Merrill Lynch in a study. In addition, diamonds would be in the
commodity market are among the laggards, especially as the demand in
China and India has been low so far, but steadily rising.

Also, Anglo American is convinced of the favorable growth prospects
for diamonds and points out that demand always exceeds the funding
more. India and China in 2005 contributed only about eight percent of
total demand at will, make these two countries in 2015 together with
the Gulf States for about 40 percent of demand. Currently the U.S.
with a share of 40 percent is still the largest diamond buyers.

Anglos is probably a massive increase to De Beers in a direct
connection with the decision of the Chilean copper company Codelco,
owned a 49 percent stake in Anglo American Sur purchase - that company
has bundled its copper holdings in the British and in Chile. The total
revenue from the (forced) sale of its copper mines should amount to
around five billion Anglo American U.S. $. "In some ways it does so in
an exchange of copper for diamonds," said Nick Hatch commented by The
Royal Bank of Scotland.

The diamond business is still considered very lucrative. With the
withdrawal of Family Oppenheimer of De Beers and the acquisition of
shares by Anglo American is one of the greatest change of ownership in
the industry before.
However, the acquisition does little to still the strong orientation
of Anglo American South Africa, his former home, moved out of the
company in 1999 to London. This is in view of the Cape has long led
the nationalization debate seen by some observers as a negative. It is
politically stable Botswana today supplies nearly 70 percent of all
diamonds for De Beers - and South Africa only slightly more than 20
percent. Only recently, Botswana and De Beers signed a new, ten-year
funding agreement.

In addition to De Beers, Anglo American holds a stake of around 80
percent of Anglo Platinum, the world's largest platinum sponsors, and
approximately 66 percent of Kumba, the largest African iron ore
conveyors. Both companies are all listed in Johannesburg. De Beers,
which was founded in 1888 by the colonial imperialist Cecil Rhodes,
had been taken ten years ago by the Oppenheimer by the Exchange. Since
then the group has stagnated despite the recent commodity boom. One
reason is that the former buying out the company with a huge debt
loads. Also, the market position of De Beers cartel structures with
the task of ten years ago has suffered: De Beers controlled about 65
percent of 2001 still lies Rohdiamantmarktes, its share today with
only 30 percent. And there are many indications that the Russian state
diamond giant Alrosa, De Beers to promote surpass soon and could
further reduce their share.

The declining market share, but also the strong dependence of the
Oppenheimer Diamond on the volatile business are likely to have
influenced the decision of the family to sell to Anglo sustainable.
Thus, the Oppenheimer had gone to the financial crisis in 2008/09,
when the diamond market collapsed totally, by a longer financial hard
times. The possibility of a new crisis in the event of a global
"double dips" would have certainly played an important role in the
decision. 2009, De Beers, its production by almost 90 percent must
reduce in order to prevent a price collapse in diamond. In addition,
the company had canceled its dividend and then added about $ 1.5
billion in fresh capital. The Oppenheimer had need for their
40-percent stake in De Beers to shoot around 600 million U.S. $. For
the family this is obviously a salutary lesson to.

Already in 2010 it came on the diamond market is a massive boost -
and many indications that the boom will continue well into this year.
Nevertheless, the market remains volatile, as the recent price drop
revealed (by up to 30%) in the lower market segment. The prices for
high-quality gems have been maintained at the high level of contrast.
At the same time the most recent setback at the cheaper stones has
ensured that the stock prices of some well-known promoters have
recently yielded significantly adjusted: Petra Diamonds have fallen by
almost 40 percent since May, Gem Diamonds has since lost one quarter
of its value.

Nevertheless, the diamond market is due to the high demand and lack
of new mines in the medium term as a particularly attractive. Most
experts are convinced that the market will recover in spite of
possible setbacks. At the same time, however, long-term high capital
expenditures are necessary. Must De Beers in the next few years alone,
some 15 billion rand (about 1.5 billion euros) into expanding its
lucrative Venetia mine in northern South Africa, which was previously
operated in the open pit, but now goes into the ground . This is to
brace for a big company like Anglo American, of course, far easier
than for a family, even if this is as wealthy as the Oppenheimer.