Snap Lake and Ekati owners face takeovers
Dave Sullivan
Northern News Services
Yellowknife (May 23/01) - Both the Ekati mine and the Snap Lake project have new owners.
In one of the biggest industry mergers in history, shareholders of BHP, the company that owns the Ekati mine, voted last week in favor of a $35-billion US merger with a giant British company.
Billiton Plc, the world's largest producer of chrome and manganese ores and alloys, now controls BHP's diamond mining interests. The company is also among the biggest aluminum and nickel producers.
Through most of the 20th century BHP was Australia's largest company. In 1885 it began as a mine in central Australia, extracting silver, lead and zinc.
Shareholders who opposed the sale feared that many of BHP's 28,000 Australian workers would lose their job. According to a report from the Associated Press, BHP chair Don Argus assured shareholders that company headquarters will remain in the country, though there will be a large corporate management centre in London.
In the other major takeover, shareholders of De Beers, the South African company that produces almost half the world's diamonds, overwhelmingly agreed to be bought out last week. Last year De Beers bought 100 per cent of a diamond discovery at Snap Lake. A mine being built there is expected to be in production within three years.
The $18.7-billion buyout needs final approval by a South African court. It will make De Beers a private company, de-listed from the Johannesburg stock exchange after 108 years, Associated Press reported.
De Beers is being bought by Anglo-American, which holds 32 per cent of the stock, the Oppenheimer family, owners of two per cent, and Debswana diamond company, which owns five per cent. Debswana is a joint venture between De Beers and the Botswana government.
After the buyout Anglo will own 45 per cent, the Oppenheimers 45 per cent and Debswana 10 per cent.
Anglo American was founded by Ernest Oppenheimer, who seized control of De Beers from founder Cecil Rhodes.
Ernest's grandson Nicky Oppenheimer is De Beer's current chair. Nicky's father Harry is credited with creating a world demand for diamonds and forming a powerful cartel which for years controlled the price of diamonds.
