July 8 (Bloomberg) -- De Beers said a black empowerment group has gained a 26 percent stake in its South African diamond sales business five months before a government deadline to compensate for disadvantages caused by the apartheid system.
De Beers Consolidated Mines, the South African mining business of the world’s largest diamond producer, bought the local sales unit for about $230 million from its parent, De Beers said in a statement today. The deal means that black empowerment group Ponahalo Holdings Ltd., which owned 26 percent of the mining operation, now also has a 26 percent stake in the trading arm.
The country enacted a Mining Charter in 2004, compelling operators to sell 26 percent of their local assets to black South Africans by 2014 as a way to compensate for the wrongs suffered during white segregationist rule, which ended in 1994. Ponahalo bought its stake in the mining business in 2006.
De Beers’ local sales unit, called De Beers Sightholder Sales South Africa and based in Kimberley, sells the company’s production at 10 events a year, known as sights. De Beers’ operations in the country accounted for about 4.7 million carats last year out of a total 31.2 million mined by the company. The Botswana unit produced 22.7 million carats.
Anglo American Plc owns 85 percent of De Beers after it bought the Oppenheimer family’s 40 percent stake in 2012 for $5.1 billion. Botswana controls the rest of the business, founded more than 120 years ago.
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