DE BEERS, the world's largest miner of rough diamonds, will soon submit a request for the transfer of mining and prospecting rights at the Namaqualand diamond mine it is selling to Trans Hex in a deal valued at R225m.

The request is called a section 11 transfer under the Mineral and Petroleum Resources Development Act, and entails ministerial approval for the transaction. The sale marks the final asset disposal in SA by De Beers, which has sold mines it no longer deems core.

The Namaqualand mine is an alluvial operation on SA's west coast and the sale has stirred environmental groups and the Hondeklipbaai community, who are concerned that Trans Hex, which is headed by Llewellyn Delport, will not be able to take over De Beers' social and environmental projects and liabilities.

The Department of Mineral Resources is working out the size of a rehabilitation fund it would like Trans Hex to set up when it takes over the mine, which is in a 256000ha land package held by De Beers. The transfer of seven mining rights, of which three are old-order and need to be upgraded to new-order rights, and one prospecting right has been a complicated process. The prospecting right straddles the Northern Cape and Western Cape, adding a twist in the provincial mineral departments' handling of the deal.

A study by De Beers in 2004 put the size of the cost of rehabilitation at R507m. But much has changed since then, Andrew Henwood, a corporate finance manager in De Beers Group Services, said during a visit to the mine yesterday. Three large diamond processing plants capable of treating a total of 3-million tons a year of ore are being demolished by an outside contractor at no expense to either party, knocking about R79m off the bill.

The rehabilitation cost will have to be funded by Trans Hex through a cash deposit in a special account, a bank-guaranteed cheque or through a specialist insurance group acceptable to the department. In the past year, while De Beers has suspended mining as it concluded the transaction, it has been engaged in rehabilitation work.

secombea@bdfm.co.za