November 24, 2009 Gaborone: Gareth Penny, Managing Director of De Beers, today announced that the shareholders of Debswana (the Government of the Republic of Botswana and De Beers), had given the green light to proceed with a major extension project at Jwaneng, the world’s flagship diamond mine. The project, also known as Cut-8, is a key component of Debswana’s North Star strategy and is the largest ever single capital commitment in the private sector in Botswana.
Cut-8 will ensure profitable and continuous production at the mine until at least 2025. Debswana will invest US$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 US$3 billion over the next 15 years.
At its peak, the project will create more than 1000 jobs. The development will require the removal of over 700 million tons of waste between 2010 and 2024, exposing an additional 78 million tons of diamond bearing ore, and deepening the Jwaneng pit to a depth of 650 metres. It is anticipated that this will create access to a further 95 million carats, which could be worth in excess of $15 billion over the life of the mine.
Speaking at an industry town hall meeting in Gaborone, Botswana this afternoon, Mr. Penny said, “Successfully managing a project of this magnitude and bringing it in on time, on budget, with zero harm to persons and property, and at a minimal impact to the environment, requires a dedicated and steadfast team. The De Beers board has every confidence in Debswana’s ability to implement the project to these exacting standards and generate the returns expected.” He continued, “This project affirms Jwaneng’s unparalleled status as the richest diamond mine, by value, in the world. In the words of Former President of Botswana, Sir Ketumile Masire, Jwaneng remains a true ‘Prince of Mines’.”
During his presentation at the Town Hall, Mr. Penny noted 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. At the same time, there have been no new major 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.
Jwaneng Mine contributes approximately 70% of Debswana’s total revenue. Diamonds from Debswana, in turn, contribute 50% of public revenue, 33% of GDP, and over 80% of foreign earnings to Botswana.