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Gold/Mining/Energy : SOUTHERNERA (t.SUF) -- Ignore unavailable to you. Want to Upgrade?

To: D.M. who wrote (2986)	4/17/1999 12:54:00 PM
From: maxed	Read Replies (1) \| Respond to of 7235

Hi. D.M. Interesting article. Looks like we can't loose with this one. We got the 7.5 million and will probably get a few bucks more. With reduced grade but increased production if they should average 7.5 mil per month for this year would come to about $90 million. Last year they spent $46.3 million on the plant and still ended up with $6.5 million in cash. The cash flow for 1999 should cover the cost of NWT, Brazil, Angola and the plat mine with plenty left over. Any money coming from the plat mine and Angola is just a bonus. Do I have my fact right or am I missing something? Eddy

To: D.M. who wrote (2986)	4/17/1999 1:00:00 PM
From: gemsearcher	Respond to of 7235

IOW , SUF gets paid in any event - and only stands to get more $ if the GDV prevails. This guy at FP certainly likes to put his own slant on SUF news. I particularly liked the flight from Angola bit - one day following the Camafuca NR.

To: D.M. who wrote (2986)	4/17/1999 1:50:00 PM
From: DavidA	Respond to of 7235

Mail and Guardian Johannesburg, South Africa. April 9, 1999 Diamond board's not De Beer's best friend For the first time, the government's diamond valuer has questioned the value of a De Beers consignment of exported diamonds -- marking a critical change in relations between the mining power and the state. MUNGO SOGGOT reports - The diamond valuer has the ‘full support' of Diamond Board CEO Victor Sibiya. A ROW which could involve millions of millions of rands of tax revenue is brewing between De Beers and the South African government's official diamond valuer. The valuer has rejected De Beers's evaluation of a consignment of rough diamonds due for export to the diamond giant's London-based marketing arm. It is the first time the valuer, known as the government diamond valuator (GDV), has questioned De Beers's pricing policy and the move is being interpreted by some analysts as a test case. The unprecedented challenge comes amid tension between De Beers and the state over the role and performance of the new valuer, which was appointed last November by the South African Diamond Board. De Beers had a close relationship with the previous valuer, whose contract even stipulated that De Beers could vet its employees. The GDV is supposed to advise civil servants on the arcane diamond industry as well as check the value of the $1-billion in rough diamonds South Africa produces annually. The new GDV's price challenge could significantly impact on the relationship between De Beers and the state, with potentially important tax implications: the amount De Beers pays in tax to the government stems from the value of the diamonds it exports to its marketing arm, the Central Selling Organization (CSO). The GDV has said the value of the diamond consignment in question is higher than that submitted by De Beers, and has refused to pass the export contract. The diamonds came from a new joint venture between De Beers and a Canadian mining company, Southern Era, in the Northern Province. In terms of the agreement between the two companies, the CSO/De Beers buys the output from the mine, which is called Marsfontein. The CSO controls about 70% of the world's diamonds. As one of the world's most successful cartels, it regulates diamond prices by manipulating the supply of diamonds to the market. Moves are already a foot in sections of the local diamond industry close to De Beers to replace the current GDV. The GDV is controlled by a Belgian national,Claude Nobels, and chaired by the former head of the Truth and Reconciliation Commission's reparations committee, Hlengiwe Mkhize. There are whispers in the industry that the GDV is not up to the job and staffed by inexperienced employees. When approached for comment on the decision to reject the Marsfontein export contract, De Beers said: "A new government diamond valuer has been appointed and a few teething problems occurred. We are working hard to resolve the matter within the diamond industry." But the CEO of the South African Diamond Board, Victor Sibiya, said in an interview this week: "I am extremely happy with the GDV. It has my full support. One of the things the GDV has done is to bring home the idea of independent valuation." Sibiya rejected criticism of the GDV's ability, saying it was "the most qualified team in the whole world". Sibiya said the new GDV's team had a collective experience of 200 years, compared with the 80 years enjoyed by the previous valuer, Proval. Sibiya confirmed that diamond industry representatives who sat on key Diamond Board committees were seeking a nullification of the new GDV contract. "The GDV is appointed. There can be no going back on that." He said it was "ironic" that the same players now gunning for the GDV had been party to its selection by open tender last year. Asked whether he was concerned that the previous GDV had not detected similar price differences, Sibiya said: "I think that question answers itself." Sibiya would not comment on Proval's performance beyond saying, "We will undertake steps to check that these valuations met with the legal requirements." He also declined to comment on the clauses in Proval's contract which gave De Beers influence over the former valuer. One clause said: "No association agreement shall be amended or cancelled without the prior written consent of the board and De Beers." Another stated: "No member or employee of Proval shall perform any functions as a valuator under this agreement unless he or she has been recognized as avaluator of diamonds by the board and by De Beers Consolidated Mines Limited." Sibiya was reluctant to address the tax implications of the diamond valuations head on. When pressed, he said: "It is important that any company in South Africa must realise that there are certain state interests which cannot be superseded by any other interest." He added: "The process of guaranteeing the state's interests is a primary concern of the GDV." Diamond Intelligence Briefs, the influential diamond industry newsletter which broke the news of the GDV's move last week, said the GDV's traditional role was to check that rough diamonds sorted for export from South Africa were consistent with the price categories set out in the CSO price list. The newsletter said the GDV had in this case gone further by declaring that the "true market value of the Marsfontein goods is significantly higher than the so-called standard selling prices which appear in the CSO price book". But the newsletter concluded the clash was unlikely to trigger a "full-scale discussion about the role of the GDV and the mechanism through which the CSO sets its standard selling prices” It added: “Undoubtedly the situation is embarrassing to De Beers." It said the GDV appeared to want to make a "test case" out of Marsfontein. De Beers's joint venture partner in Marsfontein, SouthernEra, declined to comment beyond confirming the gist of the Diamond Intelligence Briefs report. -- The Mail & Guardian, April 9, 1999.

To: D.M. who wrote (2986)	4/17/1999 1:57:00 PM
From: DavidA	Read Replies (1) \| Respond to of 7235

Mail and Guardian - Apr 16,1999 De Beers stops SA diamond exports OWN CORRESPONDENT, Johannesburg \| Friday 6.30pm DE BEERS, the world's biggest diamond producer, has frozen its diamond exports from South Africa because of a dispute with the state's diamond board, the company announced on Friday. The dispute ensued when the Government Diamond Valuator rejected De Beers' evaluation of a consignment of rough diamonds due to be exported to its Central Selling Organisation in London, Tracy Peterson, a spokeswoman for De Beers said. The GDV said the value of the consignment -- and hence the tax liability -- was higher than that submitted by De Beers and, in an unprecedented move, refused to issue an export permit for it. The dispute has developed into a deadlock between De Beers and the Diamond Board, over the methods used by the GDV -- which the board appointed in November -- as well as its function in the industry. "De Beers and the GVD cannot agree on the methods used to evaluate our diamonds. We have 14 000 categories by which we class our diamonds. He is disputing the categories into which we put diamonds," Peterson said. "If we cannot agree on one consignment we cannot agree on other ones," she added. "It has effectively stopped the export of De Beers diamonds until the dispute is cleared." She said De Beers has not exported any diamonds "for about three weeks." The standoff between the company and the diamond board this week led to a meeting between De Beers MD Gary Ralfe and Mineral and Energy Affairs Minister Penuell Maduna. Maduna subsequently set up a task team to investigate the issue, giving them until the end of next week to report back to him. Peterson declined to say how big the frozen consignment is. Economists said Friday that the impasse is unlikely to result in a shortage of diamonds for the CSO, the marketing arm through which De Beers regulates diamond prices by controlling the supply of diamonds to the market. -- AFP