Source: Financial Mail
Author: Charlotte Mathews
A new setting
Profile – Adonis Pouroulis, Petra Diamonds chairman
Petra Diamonds was too small and risky to attract SA investors in 1997, when chairman Adonis Pouroulis was looking for funds. So he listed it on London’s alternative investment market rather than the JSE.
Two weeks ago the company defied global recessionary conditions to graduate to London’s main board with a market capitalisation of £571,2m (R7,4bn). In the past decade Petra has grown from having one small alluvial diamond mine near Port Nolloth on SA’s west coast and some exploration licences in northeastern Angola into a midsized mining group with eight mines producing over a million carats a year.
In 1997 SA had recently emerged from a long war with Angola, so the country was hardly considered a good mining address. De Beers was still listed, so it was the vehicle of choice for those interested in diamond mining.
As De Beers dominated the industry, diamond juniors were virtually unknown, though there were plenty of junior copper and gold miners, Pouroulis says.
In the late 1990s Pouroulis’s dream was to find the next Venetia or Jwaneng diamond mine and he was intrigued by earlier encouraging exploration results in northeastern Angola by the Portuguese. Petra did find several kimberlite deposits there, but the ownership model imposed by the Angolan government made their development uneconomic. The government demanded the majority stake in any mine though the developer had to carry 100% of the capital and project risk.
Seeking a source of steady cash flows, Petra Diamonds merged with Crown Diamonds, which owned various fissure diamond mines in SA, to form an exploration and production company. It has grown rapidly through acquiring mines that were no longer economically viable for De Beers to operate but are profitable for a smaller, nimbler management team.
So could Petra’s next move be on some of the diamond assets that BHP Billiton plans to offload as it moves out of the industry? At this point, Petra isn’t interested.
“We have three big capital programmes: the C-cut at Cullinan, Cut 5 at Finsch and a quadrupling of tonnages at Williamson. They represent about US$700m-$800m of spending, which will grow our production from about 1,1m carats last year to 5mct by 2019.
“That’s what differentiates us from other diamond miners. We have a growth story and we will do it organically.” Pouroulis doesn’t entirely rule out a listing on the JSE.
The son of SA mining entrepreneur Loucas Pouroulis was 27 when he listed Petra in London in 1997.
Almost 15 years later, he says he “lives on an aeroplane”, dividing his time between Europe, the UK and SA. He is married with one daughter.