Debswana production jumps 14%
Brian Benza | Tuesday October 28, 2014 16:52
The third quarter output brings the company’s year to date output to 18.3 million carats with Jwaneng mine anchoring a 12 percent output jump in the first nine months of the year. Debswana, which contributes 80 percent of its revenues to government coffers, is expected to produce around 22 million carats this year.
Diamond revenues are projected to contribute about P15 billion to the 2014/15 national budget revenue target of P50 billion.
During the third quarter, Jwaneng’s production grew 27 percent to 3.3 million carats.
“De Beers Diamond production increased by six percent to 8.2 million carats in the three months between July and September. The increase was primarily due to a strong performance at Jwaneng, where higher grade material was accessed,” said parent company Anglo American in a third quarter production update.
Debswana is a 50-50 joint partnership between the Botswana government and De Beers, with the latter now 85 percent owned by global mining house, Anglo American.
The Jwaneng Mine traditionally supplies about 70 percent to Debswana’s production. On the other hand, Debswana contributes the same percentage to De Beers’ output.
Mineral revenues, which are dominated by diamonds, are expected to contribute about 30 percent to the national revenues this year as government forecast a modest budget surplus of P1.3 billion.
In 2013 Debswana ramped up production by 12 percent to 22 million carats to power parent company, De Beers’ output to a five-year high. From a high of 34 million carats in 2007, diamond production, which contributes just under 30 percent to Botswana GDP and 65 percent to foreign exchange receipts, has plateaued in the last few years as Debswana caps production to match weakening market conditions.
In the medium to long term, De Beers expect industry fundamentals to strengthen as diamond production plateaus and demand continued to increase.
De Beers expects to produce 32 million carats in 2014, which is at the top end of the company’s earlier guidance of between 31 million to 32 million carats. Global diamond production is estimated to be 130.3 million carats in 2014, which would be down 0.7 percent from 2013. The total value of 2014 production is estimated to be $12.9 billion, which would be up 2.7 percent from 2013 representing a decrease in global diamond production volume, but an increase in the price of rough diamonds in 2014.
Apart from Botswana, De Beers also owns diamond mines in South Africa, Namibia and Canada. According to Anglo, higher production at Jwaneng in the third quarter was partially offset by slightly lower production at its operations in Canada and South Africa, where the Voorspoed mine’s production dropped 40 percent to 143,000 carats.
Additionally, a planned plant upgrade at Venetia negatively impacted production volume during the period as output declined 13 percent to 776,000 carats. In total, production from De Beers Consolidated Mines in South Africa decreased 17 percent to 1.126 million carats.
De Beers Canada production from the Snap Lake and Victor mines declined 19 percent to 394,000 carats. The company also reported progress at its developing Gahcho Kué project, after attaining the necessary permits and licensing. First production at the mine is expected in the first half of 2016, with ramp up to full commercial production in 2017.