Tuesday, October 26, 2021

Karowe Mine releases forecasts on diamond mining in 2017

Lucara Diamond’s Karowe mine expects to process between 2.2 and 2.5 million tonnes of ore which is forecasted to produce around 310,000 carats of diamonds in 2017. 

Lucara Diamond Chief Executive Officer (CEO) and President William Lamb expressed the view that supply and demand fundamentals in the diamond market remain unbalanced, resulting in a very cautious market. Lamb stated that the large volume of rough diamonds sold in 2016 has not translated into increased sales of polished diamonds. He said polished diamond price indices remain at very low levels, restricting the ability for rough diamond prices to see short term and sustainable growth. 

“Demonetization in India towards the end of 2016 resulted in low to almost no liquidity for polishers to pay their employees. Although this is a short term concern for the sector, additional supply being brought into the market by three new diamond producers may continue to have an impact on prices for the smaller and lower quality rough diamonds,” he stated.

Lamb however observed that the market for large high value rough diamonds remains resilient and there remains strong demand for these goods. He said to that regard that Lucara continues to receive a high number of bids for its high value single stones as polishers look to move into the higher margin areas of the industry.

Lamb also mentioned that in December 2016 during the period of transition to the new mine contractor, Moolman Mining Botswana (PTY) Ltd, a subsidiary of Aveng Mining, Karowe processed ore from the stockpile which resulted in lower mined waste than had been forecasted for the year. He added that ore processed for the year was in excess of the previously forecasted 2.6 million tonnes with diamond recoveries totaling 353,974 carats which was in line with forecast. “Aveng Moolmans is contracted for a six year period to provide full mining services including all drill, blast, load and haul functions for both ore and waste. In February 2017, Moolmans has commenced mobilization of its mining equipment fleet into the Karowe mine,” said Lamb. 

He stated that Karowe’s operating cash costs are expected to be between $36 and $40 for every tonne processed following a planned increase in waste mining as the company advances toward early completion of a major push back by the end of 2018. The company forecasted revenue between $200 and $220 million which however excludes the anticipated sale of Lesedi La Rona which has been held in inventory since December 31 2016. 

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