International diamond company De Beers has received approval to proceed with Cut-8, a significant expansion project at the Jwaneng mine, which is expected to yield diamonds valued at more than $15-billion (P105 billion) over the life-of-mine.
De Beers MD Gareth Penny reports that the shareholders of Debswana, which includes the government of the Republic of Botswana and De Beers, have given the green light to proceed with this project, which forms a key component of Debswana's North Star strategy.
The company reports that Cut-8 will ensure profitable and continuous production at the mine up to 2025. Debswana will invest $500 million 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 is likely to total $3 billion over the next 15 years.
At its peak, the project will create more than 1 000 jobs. The development will 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 650 m. It is expected that this will create access to a further 95-million carats.
"Successfully managing a project of this magnitude and bringing it in on time, within budget, with no harm
He adds that the De Beers board has confidence in Debswana's ability to implement the project to these exacting standards and generate the returns expected. "This project affirms Jwaneng's unparalleled status as the richest diamond mine, by value, in the world."
Penny notes that demand for diamonds had been consistently increasing for many years and, as the world recovers from the recession, this trend is expected to continue in the long term, particularly as more high net-worth individuals emerge in the developing markets of China and India. Simultaneously, there have been no new significant diamond discoveries in more than a decade, and the growing demand is likely to significantly outpace what is forecast to be lower levels of diamond supply for many years to come.
The Jwaneng mine contributes about 70% of Debswana's total revenue. Diamonds from Debswana, in turn, account for 50% of Botswana's public revenue, 33 percent of its gross domestic product and over 80% of its foreign earnings.