Debswana set to award mega Cut 9 contract
Goitsemodimo Kaelo | Friday March 8, 2019 12:55
Late on Tuesday, Mineral Resources, Green Technology and Energy Security Minister, Eric Molale told Parliament that talks with the new contractor were completed in December. He however, did not name the contractor. Cut 9 involves the deepening of the pit beyond 650-metres to tap into an ore body that will yield approximately 48 million carats and support the mine to its end of life in 2034.
Molale said the signing of a mining contract was due soon. “The signing is awaiting finalisation of an agreement between the government and De Beers.
“The contract will provide for the establishment of Mining Component Rebuild Centre together with associated training centre, development of citizen suppliers in key areas of the value chain as well as training and development of citizen employees, including seconded opportunities to grow in-country skills and capability.”
It is believed the ‘agreement’ refers to the proportions of funding for the project each shareholder will have to commit to. Both government and De Beers have confirmed that Cut 9 will be funded off Debswana’s balance sheet, with no recourse to debt. An announcement of the new contractor was originally due in January, but this week, Debswana said the tender for Cut 9 was still in the final stages of completion.
“Significant progress has been made regarding the awarding of this tender,” Debswana corporate affairs manager, Agatha Sejoe said.
“Debswana will make an announcement as soon as all necessary procurement and governance processes have been concluded.”
Last November, Jwaneng Mine general manager, Koolatotse Koolatotse told journalists during a tour that “a host of reputable companies” had tendered for the Cut 9 project. He said Majwe Mining, which won and completed the Cut 8 project, was one of ‘many’ that had expressed interest.
Majwe Mining, a joint venture amongst three major contractors, scooped the Cut 8 contract running it from 2011 to 2016, with a further two-year extension to 2018. One of Majwe’s joint venture partners, Basil Read sold its interest to the other two partners early this year for P85 million.
The two-partner joint venture is understood to be among front-runners for the Cut 9 bounty. Majwe’s contract officially ended in November, but the joint venture kept its plus-300 workforce on site until recently awaiting the contract decision.
“We still have some Majwe resources currently supporting the transition to owner mining on Cut 8 that were engaged on a short term basis,” confirmed Sejoe.
“That will come to an end at the end of March 2019.” The Cut 9 will employ 729 people immediately after contract signing and 1,153 in total during implementation. Cut 9 is believed to be last open cast layer available at Jwaneng Mine. After that any further extraction of diamonds will have to go underground.