De Beers has sold an iron-ore interest in Australia as part of its efforts to streamline the business and offload noncore units.
The company has entered into a definitive agreement to sell a royalty right related to the Onslow Iron project in West Pilbara, it said Monday.
Taurus Funds Management will acquire the subsidiary company, De Beers Exploration Australia, for $125 million in cash up-front and up to $25 million at a later stage. De Beers expects the deal to close in the fourth quarter of this year.
The royalty results from an exploration project De Beers carried out searching for diamond deposits in Australia.
That effort did not turn up any viable diamond sources, but the exploration ground contained an iron-ore deposit.
De Beers subsequently sold the ground for cash and a royalty right. Now the iron-ore deposit has been developed, De Beers “is taking the opportunity to sell its royalty right for value,” it said.
“When we announced our Origins strategy on May 31, we promised to streamline De Beers,” CEO Al Cook wrote Monday in a LinkedIn post.
“This means that we can focus our people, our resources and our capital on what we do best: diamonds.”
De Beers has “seen significant progress in reducing our overhead costs by reshaping our workforce,” Cook added in a statement.
Last week, parent company Anglo American reported it was “assessing options” for reducing production to save cash.
