De Beers, the world’s largest rough diamonds miner, said shareholders in Debswana Diamond Mining Company are to inject a further P 3.3 billion into the expansion of Jwaneng mine.
The move is part of a plan aimed at giving the shining star in the Debswana stable of mines a life-line by a further six years to 2024 making one of the international legion in high value diamond production.
The expected announcement will bring the total amount of money injected into bringing on course Jwaneng’s Cut 8 to a whopping P 24 billionÔÇöincluding pre-feasibility and feasibility study cost.
“We can confirm that recent reports that De Beers and its partner, the Government of Botswana, are in the process of finalizing the logistics for the implementation stage of a project to extend the productive life of Jwaneng mine are indeed correct.
“The project will ensure profitable and continuous production at Jwaneng mine until around 2024. With this, the mine will also ensure continuity of revenue from Debswana to the shareholders for years to come.
Including all project stages from feasibility, design, implementation, mining operations as well as the cost of plant and equipment, the estimated project investment is P 24 billion in today’s money,” head of De Beers Botswana, Sheila Khama, told Sunday Standard on Friday.
“This is the largest investment that Debswana shareholders will make since the discovery and the development of Jwaneng in 1982,” she said.
The project will deliver a couple of things, most significantly continuity of production. This is important because it extends the life of the mine and uninterrupted flow of revenue into the coffers of Debswana shareholders.
“Cut 8 is about creating next level of infrastructure on the Jwaneng mine to enable continued and uninterrupted production of the diamonds from Jwaneng and thus is what Cut 8 will deliver,” Khama said.
Jwaneng Mine is the richest mine among the Debswana stable of mines and boosts of low production cost against its peers across the world. The cost per ton in Botswana is about US $ 8 tonne while in other major diamond producing countries, such as Russia, it costs about US $ 45 per tonne.
Further, the mine produced 15.6 million carats in 2006ÔÇöahead of the global economic recession.
In September last year, the mine’s General Manager, Balisi Bonyongo, told a breakfast seminar that they are further looking at going beyond cut eight.
“The question is: can we go beyond cut eight?
“Beyond 2024, we will still be having the resource to mine, but the thing is whether it is going to be open pit or underground,” he said.
The extension of the mine to cut eight will bring business opportunities to the township but the mine will be faced with a raft of challenges that will have to be confronted before 2010.
The mine’s technical manager, Rodger Thusi, had said some of the challenges that they will have to deal with include the expansion of existing infrastructure, schools, regional electricity shortages, global tires shortage, the need of more water and the building of new roads.
The expansion project is expected to see the number of earthmoving equipment going up fourfold.
“If we do not do anything, we will run out of ore by 2017. There is going to be a lot of mining waste around 2010,” Thusi, who is in charge of the cut eight expansion project, said.
Jwaneng is the world’s richest mine and any move to go underground soon will have some adverse impact on the global diamond industry as there are very few mines in the world with gem quality that it has. Further, it would change the landscape in the diamond business where Botswana has always been regarded as the low cost diamond mining production to a high cost operation.