Tuesday, November 28, 2023

Debswana’s Cut 9 contractor remains unknown


The name of the company that has been awarded the Debswana Mining Company’s mega project ÔÇô Cut 9 remains known to only a few ‘privileged’ individuals at the government enclave and the diamond mining industry.

While the signing of the contract is due between Debswana and the unnamed project contractor, Sunday Standard has been informed that a deal was reached in December 2018.

It has also emerged that the signing of the said deal is awaiting the finalisation of an agreement between Debswana shareholders ÔÇô the Botswana government and De Beers Group of Companies.

This past Friday, newly appointed Debswana Managing Director – Albert Milton could not be drawn into discussing the matter any further.

“The shareholder will announce the information through our board of directors,” said Milton on the sidelines of the stakeholders briefing on Friday in the capital Gaborone.

The Cut 9 project is expected to extend the Jwaneng mine’s life by 11 years, to 2035, and allow the extraction of a further 50 million carats. It follows Cut 8 which was carried by Majwe Joint Venture.

While Majwe ÔÇô the Cut 8 contractor is believed to have been amongst the top contestants for the tender, Debswana told Sunday Standard late 2018 that it will not automatically award the Cut 9 contract to the joint venture company. The contract between the two companies came to end on 24th November 2018

“Cut 9 brings its own challenges and opportunities for improvement taking the lessons from the Cut 8 project,” said Balisi Bonyongo ÔÇô the past immediate Managing Director of Debswana in November 2018.

Meanwhile while addressing Parliament recently, Minerals Minister ÔÇô Eric Molale said that the signing of a mining contract for Cut 9 is due soon.

“The signing is awaiting finalisation of an agreement between the government and De Beers”, Molale said,

While it is not yet clear how much each shareholder will pay towards the Cut 9, the Botswana government has in the past hinted on an amount just over P4 billion for both Cut 9 (Jwaneng mine) and Cut 3 (Orapa mine)

The government has since made a downward revision to its 2018/19 total revenue projections attributing the downward revision to the financing of the two key mining projects.

According to the government Budget Strategy Paper (BSP) for 2019 which was published in August 2018, the revised budget for the 2018/19 financial year pegs total revenue and grants to P58.11 billion, representing 10.5 percent decrease from the figure in the original budget of P64.94 billion.

“The decision by Debswana to commence the implementation of Cut 9 project at its Jwaneng Mine and Cut 3 at Orapa mine during 2018/19, funded through shareholders share of profits, necessited the downward revision of the amount of Mineral revenue due to government”, reads part of the BSP.

On the other hand, De Beers has not yet made any specific declaration in terms of its costs towards the two projects.

The Mining giant which is due for talks with government over the sales and marketing of Botswana diamonds, largely funded the Cut 8 project at the Jwaneng mine.


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