Gaborone, Botswana — MININGREVIEW.COM — 02 December 2009 – The shareholders of Debswana “’ the Government of Botswana and the De Beers Group “’ have given the green light for a major US$500 million (R3.75 billion) expansion to their flagship Jwaneng diamond mine in Botswana.
Announcing this here, De Beers managing director Gareth Penny said the project, also known as Cut-8, was a key component of Debswana’s North Star strategy, and was the largest ever single capital commitment in the private sector in Botswana.
He revealed that Cut-8 would ensure profitable and continuous production at the mine until at least 2025. Debswana would invest US$500 million (R3.75 billion) in capital expenditure and “’ taking into account all project stages including feasibility, design, implementation and mining operations, as well as the cost of plant and equipment “’ the estimated project investment was likely to total US$3 billion (R22.5 billion) over the next 15 years.
Penny said that at its peak, the project would create more than 1 000 jobs. Development would require the removal of over 700 million tonnes of waste between 2010 and 2024, exposing an additional 78 million tonnes of diamond-bearing ore, and deepening the Jwaneng pit to a depth of 650 m. It was anticipated that this would create access to a further 95 million carats, which could be worth in excess of US$15 billion (R112.5 billion) over the life of the mine.
Penny noted that demand for diamonds had been consistently increasing for many years, and said that as the world recovered from the current recession this trend was expected to continue in the long term – particularly as more high, net-worth individuals emerged in the developing markets of China and India. At the same time, there had been no new major diamond discoveries in more than a decade, and the growing demand was likely to significantly outpace what was forecast to be lower levels of diamond supply for many years to come.
Jwaneng mine contributes approximately 70% of Debswana’s total revenue. Diamonds from Debswana, in turn, contribute 50% of public revenue, 33% of GDP, and over 80% of foreign earnings to Botswana.