Debswana is due to further deepen its 650-metre pit at Jwaneng Mine to tap into an ore body that will yield approximately 48 million carats and support the mine to its end of life in 2034, BusinessWeek has established.
Known as Cut 9, the massive project will involve tapping into a 40 million tonne ore body at Jwaneng Mine.
Since the middle of last year, Debswana has been producing diamonds from its Cut 8 seam, which was accessed by deepening the pit from 410 metres to 650 metres.
Cut 8 began in 2010 at a cost of $3 billion and targets the recovery of 100 million carats between 2018 and 2024, by removing 500 million tonnes of waste and accessing an 81 million tonne ore body. Cut 9 is expected to take over from that point.
Thus far, Debswana and De Beers’ executives have declined to provide details about Cut 9, as geological and financial studies have been underway for several years, focussing particularly on the project economics. Sources close to the latest developments however say the Cut 9 project will likely be funded from ‘internal sources’ without recourse to external financiers.
Documents released by Anglo American this week indicate the project, which will be the final layer of open cast mining at Jwaneng, is now closer to final budgets and shareholder approvals. Anglo American holds 85% equity in De Beers, which in turn holds 50% equity in Debswana. The Government of Botswana holds a 15% stake in De Beers and a 50% stake in Debswana.
The documents indicate that updated
In total, according to the documents, Anglo American estimates that it has probable reserves of 174.8 million carats at Jwaneng Mine pit, and another 24.3 million carats in tailings dumps.
Although he was unavailable for comment yesterday, Energy Security, Green Technology and Mineral Resources minister, Sadique Kebonang is on record as saying the Cut 9 project will start soon.
“Cut 9 will be a big investment by De Beers requiring a huge capital outlay,” Kebonang told journalists last year.
“We should be able to start the project in the next two to three years.”
Government intends to bundle the financing of Cut 9 into its negotiations with De Beers for the renewal of the 10-year sales agreement covering produce from the Debswana mines. The sales and marketing ends in September 2020 and ahead of the talks, government has already established a steering committee, which consists of public sector technocrats, consultants, lawyers and others.
“The early start of negotiations is a way of providing security to De Beers for the funds they are going to commit in the Jwaneng expansion project,” Kebonang said last year. De Beers funded the lion’s share of the Cut 8 project.