Diamond mining company, Gem Diamonds, has announced that it has suspended its operations at Ghaghoo mine in Botswana with immediate effect because of low prices for the diamonds coming from the operation.
Although the development of the mine, located in the middle of Central Kalahari Game Reserve (CGKR), had progressed well and reached the point where it would shortly be able to start full commercial production, the material fall in the diamond price from $210/ct in early 2015 to $142/ct in December 2016, had emphasised the weak state of the diamond market for the category of diamonds produced at the mine.
The board of Gem Diamonds this week confirmed that is had placed the Ghaghoo mine on care and maintenance with immediate effect as the market for its diamonds is weak.
The company officially opened Ghaghoo, which is also the first underground mine in the country, in September 2014.
Gem Diamonds also indicated that it would monitor market conditions to decide when to restart the mine profitably. Gem operates the Letseng diamond mine in Lesotho and produces large gem-quality diamonds regularly whose prices are much better than the market for smaller diamonds.
Ghaghoo mine closure follows the shut-down of another diamond mine, Damtshaa, in the Boteti region.
Debswana confirmed in early 2016 that Damtshaa would go through a maintenance programme for up to three years as part of the company’s response to the downturn in the diamond market.
Since the second quarter of 2015, Debswana has been experiencing a significant reduction in the sale of rough diamonds due to weak demand as a result of a global macro- economic slowdown and the strengthening of the US dollar which have put liquidity pressures on cutting and polishing centres.
In 2014, Damtshaa extracted 3 800 849 tonnes of ore, treated 1 464 100 tonnes and recovered 303 219 carats.
