The United States District Court for the District of New Jersey has given preliminarily approval to
The diamond miner said settlement of the suits would “allow the company to more effectively pursue its global interests by removing the cost, risk, reputational impact and distraction from the company’s core activities required to defend multiple class actions and possible further litigation.”
The world’s largest diamond producer added that the proposed settlement did not constitute an admission of liability on its part, and would not be funded from or have any material impact on its South African mining operations.
“We believe that settling these suits is the most sensible and responsible course of action for the company to take,” said De Beers’ managing director, Gary Ralfe, in a statement.
The company says its decision is consistent with other actions recently taken in the U.S. and Europe to restructure and modernize its operations and business model.
De Beers said it hopes to receive the court’s final approval during 2006.
Last year, De Beers pleaded guilty to charges under American antitrust laws in a settlement that allowed the company to resume business in the U.S. in return for paying a US$10-million fine.
The U.S. Department of Justice had alleged that De Beers and General Electric had colluded to fix the price of industrial diamonds in the U.S. The charges against General Electric were subsequently dropped. The court heard an admission from De Beers’ Swiss subsidiary De Beers Centenary that its management had exchanged pricing information with General Electric.
Officers of De Beers had been prohibited from travelling to the U.S. by warrants for their arrest.
The company has since established a flagship retail shop in New York City. The store is a joint venture with French-based consumer-goods company LVMH Moet Hennessy Louis Vuitton.
Meanwhile, in Canada, De Beers has filed an application with the Mackenzie Valley Land and Water Board for the permits required to build and operate a mine at the Gahcho Ku project in the Northwest Territories. The mine would be De Beers’ third in Canada.
Gahcho Ku is envisaged as an open-pit mine focused on estimated resources of 31 million tonnes. The $825-million mine is expected to produce an average of 3 million carats of diamonds annually over 15 years.
The operation will be staffed by some 600 people during the peak of the 3-year construction period, with around 400 employed during operations.
The company expects the application to be referred to the Mackenzie Valley Environmental Impact Review Board for an environmental assessment.
“Advancing this project is consistent with our strategy of maintaining a pipeline of projects to meet increasing global demand as well as contributing to the sustainability of the Canadian diamond industry,” said De Beers Canada chief executive Richard Molyneux in a release.
“Gahcho Ku is evidence of the importance we attach to partnerships with Canadian exploration companies as a winning formula for growing the diamond industry in this country.”
Gahcho Ku is held 51% by De Beers, with
Gahcho Ku is situated about 90 km east of the construction-phase Snap Lake underground diamond mine, which is the company’s first Canadian diamond operation.
Snap Lake is slated to yield some 1.5 million carats annually over at least 20 years, beginning in 2007. At last count, minable reserves totalled 18.3 million tonnes grading 1.46 carats per tonne, for 26.7 million recoverable carats valued at US$109 per carat.
The company’s Victor project in northern Ontario received approval for its environmental assessments earlier this fall. Construction is expected to begin early next year, with production forecast by the end of 2008.
The $1-billion project is expected to produce 6 million carats of high-value diamonds over a 12-year mine life, beginning in late 2008.
Anglo American owns 45% of De Beers, with the Oppenheimer family holding 40% and the government of Botswana the remaining 15%.
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