Johannesburg, South Africa — MININGREVIEW.COM — 13 October 2008 – Mining giant de Beers and African Diamonds have reached agreement with the government of Botswana on terms for a mining licence to develop the AK06 diamond mine in the Orapa area of the Southern African country.
Announcements by the two companies confirm that the agreement has been signed by the government and Boteti – the AK06 joint venture in which De Beers holds 51% and African Diamonds 49%.
The announcement confirmed the following principal terms of the agreement:
- The mining licence was issued on 10 October 2008 for 15 years
- Production must commence by April 2011
- There will be no government equity in the project
- The government will receive the normal royalty of 10%
- Variable tax rate in terms of the 12th Schedule of the Botswana Income Tax Act
- Output will be sold through the Diamond Trading Company in Botswana
- The government undertakes that power will be supplied from the national grid
The announcement went on to explain that developing the mine would entail a two-phase process requiring a total investment of approximately R3.5 billion by Boteti between 2009 and 2014.
The mine would produce an estimated 600 000 carats per annum in the first three years, increasing to 880 000 carats per annum over the remainding seven years of the life of mine, it added. This equated to approximately 8.1 million carats by the end of the 10-year life of mine, with an average dollar per carat to Boteti of approximately US$ 138 (R1 240) per carat.
Employment levels at Boteti would vary between 274 and more than 850, representing significant employment and business opportunities for the people of Botswana. For Botswana the mine would reaffirm the country’s position as an industry leader and the diamond industry as the bread basket from which vital national income is derived.