Production at mining giant Debswana went down in the first quarter of the year on the back of lower grade at one of its key mines, its parent companyÔÇöAnglo American revealed this week.
“Debswana’s production decreased by 2% to 5.6 million carats due to a decline in grade at Orapa, which was largely offset by an increase in throughput at both Jwaneng and Orapa,” Anglo American said in Production Report for the first quarter ended 31 March 2015.
The Botswana based company, which is owned 50/50 by government and South Africa’s De Beers saw its production remaining flat as it produced 24.2 million carats in 2014. Anglo, the global diversified mining group with 85 percent stake in De Beers, has most of its meat in Botswana where high value diamonds are mined. Although Debswana does not state its revenues, it said income grew by 31 percent in 2014 on the back of record sales revenue owing to strong demand and a favourable exchange rate. The last statistics, published in 2012, showed the company increased distributions to shareholders from P12 billion in 2010 to P19 billion in 2011.
However, the figure declined a year later. During the period ending October 2012, Debswana had distributed P11 billion to shareholders; namely De Beers and Botswana government. Although it is a 50/50 joint venture, through dividends, royalties and taxes Botswana government gets 80 percent of the revenues. As such De Beers received P3.6 billion while government got P8.8 billion. The company, headed by Balisi Bonyongo, said last month that at the end of 2014 and early 2015, there were signs of a slow-down in the rough diamond market.
Meanwhile, all in all De Beers diamond production in the first quarter increased by 2 percent to 7.7 million carats driven primarily by higher grades at Venetia in South Africa. Anglo said production at DBCM (South Africa) increased by 14 percent to 1.1 million carats.
“This was as a result of higher overall grade at Venetia, due to the commissioning of the Red Area Tailings Treatment (RATT) plant in mid-2014. The RATT processes higher average grade, lower value material than run-of-mine ore from the pit”.
Production from the Canadian mines increased by 25 percent due to productivity improvement initiatives at both Snap Lake and Victor.
“Diamond production decreased by 8% compared to Q4:2014 due to the planned change in mining area at Venetia, along with a focus on waste mining at Jwaneng. Full year production guidance has been reduced from 32 to 34 million carats to 30 to 32 million carats, in light of current trading conditions”.