De Beers, facing losses, has decided to sell an iron ore royalty right in Australia for $150 million to streamline its operations.
The royalty right dates back to the early 1980s when De Beers, while searching for diamonds, discovered an iron ore deposit instead.
On July 22nd, De Beers announced it had agreed to sell the royalty right at the Onslow Iron project in West Pilbara to Taurus Funds Management, a global mining and metals investment firm.
The Onslow Iron project is a joint venture, primarily developed by Mineral Resources (MinRes), which holds a 40% stake.
Under the terms of the agreement, De Beers will receive $125 million upfront in cash and up to $25 million in deferred consideration for this non-core asset.
Anglo American, De Beers’ parent company, has been focused on streamlining operations, aiming to reduce De Beers’ annual overheads by $100 million. De Beers reported a loss in the latter half of last year due to weak demand.
De Beers Group CEO Al Cook stated, “We have already made significant progress in reducing overhead costs by restructuring our workforce to support our new strategy. The sale of this royalty right is another step in our business streamlining efforts, allowing us to exit this non-core asset at an opportune time and achieve value.”
