Botswana's top diamond mine to extend life
November 26, 2009
By Jerry Bungu and Ron Derby
Debswana Diamond, the joint venture between De Beers and Botswana's government, will spend $3 billion (R22.5bn) over the next 15 years extending the life of its Jwaneng mine, the world's biggest diamond operation by output value.
The project "will ensure profitable and continuous production at the mine until at least 2025", De Beers managing director Gareth Penny said in a statement yesterday.
The project, called Cut-8, would create access to a further 95 million carats of diamonds, the statement said.
The open-pit Jwaneng mine in south-central Botswana produced 14 million carats last year, spokeswoman Lynette Gould said yesterday.
Debswana, which accounts for about a fifth of world diamond output, shut its four mines in the country on December 27 after demand fell.
The venture has since reopened three of the mines after rough diamond prices recovered and gem dealers rebuilt stockpiles.
Debswana's fourth mine, known as Damtshaa, would remain closed through next year, managing director Blackie Marole said yesterday in Gaborone.
"The cutbacks were so severe and so sharp that the market was genuinely short of rough" diamonds, Charles Wyndham, a co-founder of WWW International Diamond Consultants, said from the UK on November 11. WWW International tracks trends in rough and polished prices.
Diamond sales were now at about 47 percent of the level they were at the same stage a year ago, Penny said yesterday in Gaborone. The company holds 10 annual gem sales, known as sights, to selected customers from Belgium, Israel and countries known for diamond cutting.
Botswana expects to produce about 17 million carats of diamonds this year, Gaobakwe Gaobakwe, the permanent secretary to the Ministry of Minerals, said at the De Beers presentation.
Diamonds from Debswana contribute half of Botswana's public income, a third of its gross domestic product and more than 80 percent of its foreign earnings, according to De Beers.
Botswana's gross domestic product contracted 18.8 percent during the first three months of this year as a result of the demand for diamonds collapsing, according to the nation's Central Statistics Office.
The country's economy expanded by 1.3 percent in the second quarter from a year earlier as demand recovered, the agency announced on November 5. - Bloomberg
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