Saturday, December 3, 2022

Lucara moving fast on AK6 after S.A steel sector strike setback

Lucara Diamond Corp said the steel sector strike in South Africa sometime this year that caused delays in the delivery of construction materials to site has pushed forward the commissioning of AK6 by at least another two months.

The company’s Chief Executive Officer, William Lamb, told Sunday Standard on Thursday night the strike has had an impact on the whole operation, including petrol and electricity connection.

“The strike took two weeks and another two weeks was needed to get people to work,” Lamb said.

The industrial action ran from July 1 to July 15. However, the majority of companies only got back to normal working conditions by July 22 and recovered backlog by July 29, 2011.

This affected both steel fabricators and several mechanical and electrical contractors with a direct delay of two weeks and an indirect delay of a further two weeks.

“It became a much bigger problem,” he added.

The company, which had hoped to commission the mine by end of July, is now looking at beginning of 2012.

Lamb said now part of the plant will be ready by December, but everything else by February, adding that construction at the site was 66 percent complete by the end of July.

The company has reviewed the schedule with their EPCM contractor and the scheduled handover to operations has moved from December 16, 2011 to February 16, 2012.

It was originally planned to have the facilities handed over to the mine operations team prior to the construction industry in southern Africa taking their annual break from mid December to mid January.

“This break has added a month to the delay caused by the industrial action. The company continues to work closely with their EPCM partners and the major contractors to identify opportunities to bring forward the handover date to operations,” it said on its website.

However, the development is moving fast now with Lamb praising the people he has on the ground.

“When the steel arrives, everything moves quickly,” said Lamb.

“It has been a frustrating time over the past few weeks, seeing the project schedule be affected by actions outside of the control of the project team. With the industrial action now resolved, construction activities at AK6 are returning to normal. All alternatives are being considered to bring the mine into production as soon as possible,” Lamb added.

AK6 has an initial 15-year mine life and will produce 400, 000 carats per year and it is one of the few diamond mines with significant production coming on line in the next 3- 5 years.

Lamb said diamonds recovered from the mine are expected to be sold through a tender auction conducted in Botswana.

“During the first year of production, sales value in Gaborone will be benchmarked against sales in Antwerp,” he said.

He added that a sales and marketing office has been established in the Diamond Technology Park with the local Sales and Marketing Manager appointed and working with expertise from Antwerp.

Lucara, a member of Lundin Group of Companies and still a junior miner, has other assets in Lesotho in which they own 75 percent (while 25 percent is owned by Lesotho government). Mothae mine in the mountain Kingdom is currently in the trial mining stage.

Both the Mothae and AK6 (100 percent owned) are ‘world class’ assets with tonnage and the two could increase significantly with the continued recovery of Type IIa and large stones.

Currently, less than 2 percent of the world’s diamonds are Type IIa. AK6 is buoyed by the diamond market, which is also pushed by growing demand in China, Russia and India and other emerging markets.

On Thursday, Lucara chiefs held a cocktail session with the media and investors where a progress report on AK6 and Mothae in Lesotho was revealed. Lamb said the listing will allow local investors to participate in a resource which has made Botswana what it is today since diamonds were first discovered.

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