In line with improved global demand of rough diamonds, mining giants Debswana said its plans for 2011 is to increase production as key markets recover from the worst economic recession.
The company, owned 50/50 by government of Botswana and De Beers, could not readily provide information on whether it had met the 2010 target; it was bullish it will up production at its mines.
“We are still finalising our reports for 2010, but we definitely have exceeded the target of 20 million carats that we had set for 2010,” Esther Kanaimba-Senai, Public & Corporate Affairs Debswana Group Manager, said on Friday.
“However, we are not in a position to give the actual figures at this point, as consultations with relevant stakeholders are yet to be finalized,” she said.
Last year, the company set itself a target to produce between 20 ÔÇô 23 million carats of diamonds from its mining operations at Orapa/Letlhakane and Jwaneng.
Jwaneng, the cream of the Debswana group, is undergoing a P24 billion Cut 8 project that is aimed at extending the life of the mining town.
Cut 8 will prolong the mine life of Jwaneng to 2024 and secure 102 million more carats while Cut 9, which is at a prefeasibility stage, will take the mine to 2030.
Kanaimba-Senai added that in view on the improving market for diamonds, Debswana expects to produce more than what it did in 2010, but warned that it will certainly be challenging yet achievable target.
The company’s target is also below the pre-recession levels where it was able to produce over 30 million carats of diamonds that were largely consumed in the US markets, that accounts to 45 of the global demand.
“Although the market has improved significantly, we are still not yet back to pre-recession levels,” the company stated.
“However, should demand increase substantially, our mines are configured to be able to meet that demand up to 33 million carats,” it said.
The miner stated that should the market ask them to ramp up production, its mines are currently able to produce up to 33 million carats which is what the company produced in pre-recession times.
The demand for rough diamonds is mainly dependent on the recovery of the leading economies that include the US and Europe to supplement the emerging ones in Asia, like China.
China carried the whole world during recession as it bought the world through its Sovereign Wealth Funds (SWF).
Debswana is bullish about output as the international market has improved significantly. If Debswana increases its production, it will restore De Beers’ glory as the leading global diamond miner.
Last year, the Russian mining company Alrosa was the world number 1 as it produced over 30 million carats. Pundits predict that De Beers group could produce 40 million carats this year while Alrosa could produce below 34 million carats.
Debswana accounts for about 60 percent of the total De Beers output and fifth to the global rough output.
Global diamond production is expected to stabilise in 2012.