De Beers Group today announced it has entered into a definitive agreement for the sale of an iron ore royalty right related to the Onslow Iron project in West Pilbara in Australia, as part of its focus on streamlining the business and divesting non-core assets in support of its Origins strategy.
Taurus Funds Management will acquire the subsidiary company, De Beers Exploration Australia, that owns the royalty for an upfront cash consideration of US$125 million and up to US$25 million of deferred consideration. The sale is expected to close in Q4 2024, pending customary closing conditions.
De Beers Group’s ownership of the iron ore royalty right results from its historical global exploration activities. While De Beers did not discover any economically viable diamond deposits in Australia as a result of its exploration programme, its exploration ground did contain an iron ore deposit. That ground was subsequently sold for cash and a royalty right. With the iron ore deposit now developed, De Beers is taking the opportunity to sell its royalty right for value.
De Beers CEO Al Cook said: “As part of our Origins Strategy we committed to streamlining the De Beers business. We have already seen significant progress in reducing our overhead costs by reshaping our workforce in support of the new strategy, and the sale of this royalty right continues the process of business streamlining as we exit this non-core asset at the right time and for value. With a simpler and more efficient corporate structure, we will sharpen our focus on our core business of producing the world’s most beautiful natural diamonds and bringing them to market through the most value-adding channels.”