De Beers sees Africa risk perceptions rising
By Hilary Gush and Nicholas Kotch
JOHANNESBURG, Sept 12 (Reuters) - Land seizures in Zimbabwe and the leaking of South Africa's draft plans to spread black mining ownership have sent political risk perceptions of the region soaring, a De Beers director said on Thursday.
Jonathan Oppenheimer said Namibian President Sam Nujoma's ringing endorsement of Zimbabwe's land campaign had also fuelled concerns about political stability in southern Africa.
"The concern for me is that there is a popular (move to politicise) key economic issues in the region at the moment," he told Reuters in an interview.
But given the economic crisis in Zimbabwe, he said South Africa had "enormous" scope to effect change in its northern neighbour. Up to six million Zimbabweans face severe food shortages, partly caused by President Robert Mugabe's controversial land scheme.
Oppenheimer, 32, is head of African producer relations for the world's biggest diamond group. He is also the son of De Beers Chairman Nicky Oppenheimer, who is locked in talks with the South African government on increasing black participation in the white-dominated mining industry.
Oppenheimer said the goal of 10-15 percent black ownership mentioned this week by part owner Anglo American <AGLJ.J><AAL.L> as acceptable targets were also achievable for De Beers.
"On a scorecard approach, which does not focus exclusively on equity, a number of 10 or 15 percent of the value or participation...is something I believe is reasonable .I actually think it will be more," he said.
"And 25 percent of the holistic transformation -- it's an impossible thing to define -- is something that is achievable, as quickly as possible."
De Beers, which employs some 10,000 people in South Africa, its 45-percent owner Anglo and other industry players, are negotiating the details of the government's so-called mining charter to up black participation in mining.
Details of the government's initial draft plans, leaked in late July, set targets of 30 percent black ownership of existing operations and control of new mines within 10 years.
The details, from which the government later distanced itself, sent investors fleeing local mining shares.
But Oppenheimer said that after its initial "fixation" with equity, much of the talk now was "in the context of broad-based economic empowerment and moving away from the equity issue".
He said De Beers -- which supplies two-thirds of the world's diamonds -- would also like to outsource to black-run businesses more than half its spending not sourced directly from big firms.
Of the 960 million rand ($90 million) it currently outsources, about 122 million comes from black groups.
ANGOLA, CONGO "ELEPHANTS"
Oppenheimer listed Angola and the Democratic Republic of the Congo as two of the most exciting gem-mining opportunities. De Beers is awaiting the outcome of arbitration in its dispute with Angola, where it froze its operations last year.
He said that in the southwest African nation, De Beers had "behaved in a way that was very prim and proper and that has not been that attractive to some people in the Angola government".
In the Congo -- an "elephant" of an opportunity -- De Beers was looking at the Miba mine. Although its diamonds were of low quality, it was potentially the war-torn country's biggest mine.
"We are spending a lot of time thinking about how we could be involved ... I'd hope the Congo would become something we could consider in the next 72 months, if not sooner."
In Europe, De Beers was still waiting for a European Commission decision on its five-year deal to buy $800 million worth of diamonds a year from Russian producer Alrosa.
"So far we have no indication from them that there are any insurmountable issues," he said.
But last week, Alrosa said it expected the European competition watchdog to force it to cut the value of its rough diamond sales to De Beers by 25 percent to $600 million.
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