Thursday, October 1, 2020

Debswana crafting a long-term mining strategy

While it is generally agreed that diamonds are not forever, the Debswana head of mining has assured Batswana that diamonds are not about to get depleted at the company’s mines.

The diamond miner, which is owned 50/50 by Botswana government and De Beers, is currently working on long term plans to prolong the mine lives of its four operations.

Making a presentation to the media on “Mining Options Beyond Current Approved Plans”, Debswana Group Manager – Mining, Len Dimbungu said diamonds could be mined for many years to come at all of the company’s operations, especially at Jwaneng and Orapa mines. More importantly, he underscored the fact that Debswana is still a long way off from going underground.

He, however, revealed that going into the future ways of mining will be different and costs will be higher while margins will be reduced. This, he said, will be on account of increased depths of the mines.

Because of the many challenges posed by underground mining vis-à-vis open pit, Dimbungu said Debswana would want to remain open pit for as long as is possible.

Available data shows that diamond mining accounts for more than one-third of Botswana’s GDP, 70-80 percent of export earnings and about half of the government’s revenues, which all goes a long way to demonstrate the sensitivity of Botswana’s economy not just on the diamond prices, but also on Debswana’s efficiencies.

“The diamonds are there,” said Dimbungu. “What will be reduced will be profits that we are making. Underground reduces the rate of mining.” He also ruled out contract mining saying as long as owner-mining continues to make sense for Debswana, outsourcing will at least for now be limited to removing the waste.

Talking about Debswana’s medium to long-term projections, Dimbungu said operating costs, including those associated with underground mining, will go higher as will be the challenges thus creating less returns on investment to shareholders.

“With increased depths, there comes a time when the cost of removing ore is more than what will be recovered.”
Issues related to safety as well as efficiency increase with depths. He said more than ever, such issues will become more pertinent once a decision is made to go underground, he said.

Debswana is currently putting in place strategies for its key mines in Orapa and Jwaneng.

The strategies “Jwaneng and Orapa Resource Extension Projects” will determine whether the planned projects will be economical.

Dimbungu notes that because mining takes time to be done, at least planning should be 20 years ahead of operations. This is the case with the P24 billion Jwaneng Cut 8, which is expected to transform Jwaneng into a super-pit mine.

The project, which was launched in 2010 and is sponsored by the two shareholders, will prolong the mine life by another 7 years when Cut 7 gets depleted.

Under Cut 8, about 713 million tons of waste will be removed between 2010-2016 that will expose 75 million tones of diamond bearing ore and, therefore, extend the life of the mine by at least seven more years from 2017-2024.

For the past three years, the contracted consortia; Majwe Mining and Basil read have been doing a lot of waste mining, and it is only now that the company is beginning to ‘pick up a little bit of ore from Cut 8′, said Dimbungu.

“We are busy looking at Cut 9, but indications are that it could be viable as open pit mine rather than underground,” said Dimbungu. He said so far much of the knowledge on Cut 9 is inferred, “meaning that it is not where we will want to be.”

Dimbungu said, by the current estimates, it will not be before 2030 that Debswana could start going underground.

Similar works are progressing at Letlhakane and Orapa where the company is doing Cut 2 for both mines. Letlhakane mine has high value diamonds, “but as nature would have it, it’s a small deposit.”

Orapa, which is the second largest mine in the world sitting on a 120 ha surface, is also sitting pretty with diamond resource.

Currently, mining activity is taking place at Cut 2 and it will take Orapa up to 2026.
Mining at Cut 3 will commence in 2016 and will take the mine up to 2026. There is a possibility of Cut 4 at Orapa or an underground mining.

Damtshaa, which started operations in 2003, will go up to 2026, according to approved plans.

Debswana can also tap into its hefty tailings resource. It is currently sitting on millions of tones of tailings from Jwaneng and Orapa. Orapa is currently sitting on tailings material that can produce 100 million carats of diamonds, while Jwaneng has 39 million tones of tailings materials. With advances in technology, it is expected that more efficient ways of extracting diamonds from the tailings will yield better results than would have been the case a few decades ago when operations started at both Jwaneng and Orapa.

Notwithstanding the large amount of tailings resource, Dimbungu is of the view it will not be economic to process the tailings and halt normal mining activities.

“It does not make business sense to stop mining and process tailings,” he said adding that diamonds come in different sizes. “The value of (diamonds from tailings material) is much lower than those from run-off mining”. He said the small size of diamonds found in the tailings is not what the market demands.

While Debswana was forced to shut down its operations in 2009, and only reopened them at a much reduced capacity, Dimbungu said the company is now about to reach full capacity in all its operations.

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