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Gold/Mining/Energy : SOUTHERNERA (t.SUF)

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To: Goalie who wrote (1052)	5/7/1998 1:47:00 PM
From: Goalie	of 7235

Is De Beers losing its grip in S.A? Interesting story in Business Day... 07 May 1998 Alexkor explores new avenues to market diamonds Rene‚ Grawitzky ALEXKOR, the state-owned diamond mine in the Northern Cape, was reviewing its relationship with the Central Selling Organisation (CSO) with a view to cancelling its contract, company sources said yesterday. De Beers denied any change to the arrangement while Alexkor's management and board indicated that a fact-finding mission to Antwerp, Russia and London was aimed at evaluating new marketing avenues and to see where the company could get the best price for its diamonds. Alexkor board chairman Nona Gosa said the visit did not necessarily mean the contract with the CSO would be cancelled but could lead to negotiations over better prices for their diamonds. Soci‚t‚ G‚n‚rale Frankel Pollack analyst Ross Gardiner said any move to cancel the contract with the CSOcould be in preparation for a fairer bidding process for the company that won the contract to manage Alexkor in the run up to its final sale. The CSO, the SA Diamond Board and Trans Hex constitute the three main streams for diamond sales in SA. Gardiner said in view of the fact that Trans Hex might be interested in bidding for the management contract, the scales might be tipped in its favour if it also marketed Alexkor's diamonds. De Beers and Trans Hex are strong contenders for the management contract. Alexkor CEO Thian Combrinck said the overseas trip was part of a three-pronged strategy to turn the company around. The strategy aimed to ensure effective security for the product, improve efficiencies and productivity and ensure maximum value of product by familiarising management with the various marketing options available. To achieve these objectives the company had signed an agreement with labour on productivity improvements. It had also replaced De Beers security with an international security team. Combrinck said the mine also wished to develop its internal capacity to understand and evaluate the value of its products.

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