Diamond Buyers Club

(Bloomberg) — A diamond mine in Botswana sold for $8.1 million at an online auction after its liquidators failed to secure viable offers via conventional bids.

Online bids for Lerala Diamond Mine opened on May 24 and closed at 5 p.m. local time Wednesday. Lerala, which is owned by Sydney-based Kimberley Diamonds Ltd., was placed under judicial management in June last year due to weak sales and high operating costs.

“I can confirm the winning bid was $8.12 million but beyond that I cannot comment on the identity of the bidder nor any other information, until the liquidator gives me the go ahead,” John Taylor, an associate director at auctioneers GoIndustry DoveBid South Africa, said by phone.

On offer were five kimberlite pipes ranging from 0.16 hectare to 2.35 hectares in area, mining rights, a processing plant that can handle 200 metric tons per hour, a 4.2-megawatt diesel generator and other assets.

The mine has probable reserves of 5 million tons at a grade of 31 carats per 100 tons and inferred resources of 10.3 million tons at 31 carats per 100 tons.

Botswana relies on diamonds for almost a fifth of its gross domestic product. It’s the world’s biggest diamond producer after Russia, and most of its gems are mined by Debswana, a 50-50 joint venture between the government and De Beers. Anglo American Plc owns 85 percent of De Beers, with Botswana’s government holding the balance.

(By Mbongeni Mguni)

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