Thursday, May 19, 2022

Debswana to bolster De Beers’ production in 2015

Diamong production at De Beers for next year will possibly exceed production levels of 2014, mainly powered by Debswana, a company where the diamond major is in a joint venture with the government of Botswana. Anglo America plc’s full year results for the period ended 31, December 2014 showed that full year diamond production increased by 5 percent to 32.6 million carats from 31.2 million carats in 2013.

The results reflected a strong performance from Debswana, partly offset by slightly lower production at Snap Lake and Kimberley, with all other regions performing broadly in line with 2013.

“Diamond production for 2015 is forecast to be in the range of 32 to 34 million carats, subject to market demand,” Anglo said.

Diamonds continue to play a major role in Anglo American, as it helped the diversified mining group to survive a tough period characterized by falling commodity prices. According to Anglo, Debswana, owned 50/50 by Botswana government and De Beers, benefited from greater efficiency at its processing plants following operational improvement initiatives. Debswana produced 24.2 million carats, 12.9 million from Orapa and 11.3 million from Jwaneng.

Performance was also enhanced by recovery from the carry-over effects through 2012 and 2013 of the Jwaneng slope failure clean-up as well as the Orapa No. 1 plant maintenance stoppage that occurred in 2013.

Anglo revealed that Jwaneng Cut-8 waste mining is progressing well, with just over 50 percent of the 500 million tonnes of waste stripping required to expose the ore now complete. During 2018, Cut-8 will become the main source of ore for Jwaneng and extend the life span of one of the world’s richest diamond mines to at least 2033, providing access to an estimated 91 million tonnes of ore, containing approximately 110 million carats.

Anglo American Chief Executive, Mark Cutifani, praised diamond contribution to the group as it delivered a 15 percent return on capital employed (ROCE).

“The performance of our diamond business, De Beers, is a clear demonstration of the benefits and value of our diversified business model,” he said.

“The integration of De Beers into Anglo American is complete; De Beers contributed $1.4 billion of underlying EBIT in 2014, 28 percent of ÔÇô and the second largest contributor to ÔÇô the Group’s total, and delivered a 15 percent return on capital employed (ROCE).”

De Beers’ Chief Executive Officer, Philippe Mellier said last week that diamond prices will recover in the second half of the year after bemoaning cautious markets in the first quarter as retailers assessed their inventory levels following the Christmas shopping season.

“I definitely see some potential for a price increase this year, but it’s too early to tell,” Mellier said on Business Day quotes.

Anglo American owns 85 percent stake in De Beers while the remaining 15 percent is held by government of Botswana.


Read this week's paper