For sale: beachfront town, suits ghosts

Posted On Monday, 30 March 2009 02:00 Published by eProp Commercial Property News
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Two entire towns on a remote stretch of South African coast littered with shipwrecks, diamonds and mine dumps are up for sale.

Property-Housing-ResidentialTwo distressed Namaqualand diamond towns need new owners

The problem is nobody is sure how to sell a town — or how to buy one.

At stake is the livelihood of dozens of businesses and access to 140km of Namaqualand coast that until now has been a virtual no-go zone due to mining activity by De Beers.

The company is battling to support the once-bustling mining centres of Kleinzee and Koingnaas, where thousands of people have lost their jobs due to hard times in the diamond trade.

But instead of throwing everybody out and sending in the bulldozers, De Beers is trying to strike a deal with the government to have the two settlements officially proclaimed as towns, in exchange for a massive sale of real estate and the donation of town infrastructure to two local municipalities.

During a visit to the area this week the Sunday Times spoke to several desperate residents who fear the towns are already beyond repair.

Many of the houses and streets appeared deserted, and retrenched mineworkers sat aimlessly outside Kleinzee’s eerily quiet main supermarket.

The company has already cut daily bus services to outlying towns and the three schools have only 108 pupils. The library, two churches, a huge town hall and several sports facilities, including a nine-hole golf course, stand empty.

Despite the Namaqualand mines nearing the end of their lives, De Beers says it is committed to helping the towns get back on their feet and will keep basic services running until the government steps in.

The company has drastically reduced shop rentals and adjusted debt repayments to help businesses cope. It is also retaining key personnel such as teachers in the hope that the towns recover before there are no pupils left.

“We have to move fast. We do believe there is sufficient potential here to stop the town’s population falling below that critical point it needs in order to survive,” De Beers Namaqualand spokesman Gert Klopper said.

Although talks between De Beers and relevant government bodies started in 2007, the issue has become far more urgent this year as mining grinds to a standstill in the face of the global economic meltdown.

And the proclamation process is being complicated by an ancestral land claim to De Beers property, including the two towns.

Mineworkers are fuming because they are being turfed out of their homes and forced to return to subsistence farming on the dirt-poor outskirts of the mining area.

But De Beers says it has no choice but to lay off workers and cannot afford to subsidise two entire towns. “Those days are over,” one company executive said.

Although exact figures are unclear, the National Union of Mineworkers said the operation now employs only 227 people — from a high of around 3500 several years ago. The mine has been operating at a R300-million annual loss for the past three years.

Observers fear the Namaqualand coast, once the biggest diamond producing area in the world, is turning into a deserted stretch of ghost towns and rusty machines, much like parts of Namibia.

This month De Beers completed a draft preliminary mine closure plan for Kleinzee and Koingnaas, although senior officials say the company will retain key landholdings with diamond-mining potential.

The exit plan foresees a gradual withdrawal for De Beers and a phasing in of smaller scale mining activity, possibly involving other companies. “Mining is simply not strong enough anymore to carry the regional economy,” said Klopper.

To survive, the towns would have to reinvent themselves and create an alternative economy based on tourism and non-mining industries such as farming aquatic plants and animals and conservation.

Klopper said the company was confident proclamation would go ahead and was spending millions on upgrading infrastructure, conducting specialist studies and setting up trust funds to help sustain the towns until they were self-sufficient. “We hope to be in a position where we can start with pre-emptive selling this year,” he said.

Kamiesberg municipal manager Gert Maarman said the municipality needed to be sure the towns would not be a drain on scarce resources: “It’s no problem taking over those towns but it must be economically viable because there are a lot of costs,” he said.

Last modified on Monday, 19 May 2014 10:53

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