Sunday, June 23, 2024

Boteti, gov’t closer to concluding AK6 share deal

The promoters of AK6 and the Botswana government are about to reach a shareholding deal over the proposed diamond mine after a long protected negotiation that started at the beginning of the second half of the year.

Sources from both camps told Sunday Standard on Friday that the “negotiations are ongoing and are expected to be concluded shortly”.

Sources said government has given the negotiating teams up to August 12, this year to come out with a workable deal. However, a top official at the Ministry of Minerals said Friday that if a deal could not be secured by then there is always a provision to extend the deadline.

“The deadline does not mean anything. This is not cast on stone, it can always be extended to allow the negotiations to continue,” Deputy -Permanent Secretary at Minerals, Jacob Thamage, said Friday.
The ongoing negotiations are prompted by Section 51 of the Mines and Minerals Act which states that, in terms of mining application, especially when it involves the mining of diamonds, the government must be given a chance to negotiate an equity stake and the marketing of diamonds.

Last September, African Diamonds, together with the world’s largest diamond producer, De Beers, filed for a mining licence of the AK6 which was expected to be processed within six months.
But in April this year, the two promoters were advised by government that their mining application was accepted subject to meeting the requirements of Section 51 of the Mines and Minerals Act.

In a note which was posted on African Diamonds on April 3, the company said it “has received a letter from the Ministry of Minerals, Energy and Water Resources of the government of the Republic of Botswana stating that the Mining Licence Application for AK6 meets the requirements of section 51 of the Mines and Minerals Act to proceed with negotiations regarding the issue of the mining licence”.

The Department of Mines has said all information supplied to the promoters, including environmental impact assessment and the mining plan, were of the highest quality but they wanted to find out as to whether the promoters are prepared to give government an equity stake.

“We are delighted with this important step in the process of the issuing of the AK6 Mining Licence. We believe that we have the full backing of De Beers and the government of Botswana to move this world class project towards production and we look forward to concluding negotiations as soon as possible,” John Teeling, chairman of African Diamonds has said.

The proposed mine is 15 kilometers south-east of the Letlhakane Village and is expected to produce its first gem diamonds by 2009.
The mine is expected to produce one of the best diamonds in the country similar to that of Letlhakane mine both in terms of production per carat and the quality.

The mine is expected to produce 600, 000 (gem quality ) carats in the first year, and thereafter production will pickup to the range of 1.2 million ÔÇôto- 1.5 million carats per annum.
AK 6 is a joint project between African Diamonds and De Beers, the South African-based diamond giant, which owns 51 percent of the project and can acquire up to 70 percent equity by funding the exploration work and bankable study.

The exploration exercise was carried out by De Beers following the joint venture through the use of its new technology. They found out that the kimberliteÔÇöthe volcanic rock deposit containing diamonds ÔÇô was much larger than originally thought.

It also contains the rare nitrogen free gemstone deposits found in 45- carat Hope Diamond in the Smithsonian in New York and the Cullinan Diamonds which are part of the Crown Jewels.
According to current estimates, the mine is expected to produce very good quality diamonds of about US $ 150 per carat.

The mine will initially be an openÔÇôcast with a life-span of between 12 and 15 years at a depth of about 200 meters. It also has a provision for an underground which will stretch its life-span to possibly 30 years.


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