In a hostile bid, De Beers set its sights on acquiring Ashton Mining Ltd. to increase its presence in Australia, Reuters reports. If succesful, the $522 million bid would give De Beers a 40.1% stake in the Argyle mine, the world's largest diamond mine in terms of production, and advance its plans to concentrate on supplying diamonds to world markets. "It is a strategic objective to broaden the product that we offer to our clients and to broaden the geographic base of production, which at the moment is concentrated in Africa," said Gary Ralfe, managing director.
De Beers' legal team is still evaluating whether there are competitive issues created by the acquisition in Australia or with the European Commission, says Reuters.
The remaining share of the Argyle mine is owned by Rio Tinto Ltd. PLC. De Beers did not contact Rio Tinto before making the bid, and Rio Tinto has no pre-emptive rights to buy the rest of the mine.
In 1996, the Argyle joint venture withdrew from De Beers' Central Selling Organisation and marketed the mine's production on its own through Argyle Diamond Sales. One of the conditions of De Beers' bid was that Ashton's share of Argyle production would not have to be sold through Argyle Diamonds Sales.
- by Liz Smutko