Nambed To Invest $1 BLN To Extend Life Of Mines

| Monday August 9, 2010 00:00

 

Namdeb hopes the investment, partly self-financed and partly via funds from banks, will extend its diamond operations in the coastal area to 2050.

The company also said it expected to produce 500,000 carats of diamonds this and next year from its onshore operations, compared with 329,000 carats last year.

While existing deposits are due to run out by 2014, Namdeb believes it can find a further 68 million carats along Namibia's shoreline between the high-water mark and 70 metres underwater.

'Of this, the company regards 10 million carats with high confidence,' Namdeb General Manager Mitford Mundell told a news conference. 'We are implementing new sampling techniques to give investors assurances about the deposit.'

Managing Director Inge Zaamwani-Kamwi said Namdeb was looking at a consortium of local banks to help finance the investment, some of which will be used to develop shallow-water diamond mining techniques.

'No one is better at mining alluvial deposits than us,' she said. 'This means most of the technology is developed in-house.'

De Beers is 45 percent owned by mining group Anglo American (AAL.L: Quote), 40 percent by South Africa's Oppenheimer family and 15 percent by the Botswana government.

The sands along Namibia's shoreline are believed to be the largest alluvial diamond deposits in the world, containing between 0.5 billion and 3 billion carats.

As a first step, Namdeb will spend $27 million in the next two years on its existing onshore operations.

Last year it discovered a 1 million carat high-grade deposit south of its mothballed Elizabeth Bay mine, which will reopen towards the end of this year.

Zaamwani-Kamwi also said a deal in which the government is increasing its stake in deepwater miner De Beers Marine Namibia to 50 percent was close to completion.

De Beers Marine Namibia mines the Atlantic 1 deposit for Namdeb, supplying 600,000 of the company's 929,000 carat output in 2009.

Namdeb was also looking to diversify exports to Asia.

'China, India and Hong Kong have shown promising demand,' Zaamwani-Kamwi said. 'We have stepped up our marketing efforts in these places.' (Reuters)