Debswana axes P15.7bn contract to deepen Jwaneng Mine
Debswana has terminated a P15.7 billion contract to deepen the world’s richest diamond mine, opting instead to do the work in-house. In a statement on Monday, Debswana said the termination of the contract is with effect from January 4 and the contractor, Majwe Mining, had been given a 90-day notice period.
“The Cut 9 operation will transition to an owner-mining operation with some of the key services and resources, such as labour, being provided by contractors/service providers to Jwaneng Mine,” Debswana’s head of corporate affairs, Rachel Mothibatsela said.
The diamond mining group did not provide details on why the contract was in-sourced. Questions sent on the matter had not been responded to by press time on Wednesday.
Separately, however, another Debswana official familiar with the latest developments, told BusinessWeek the main reason for terminating the contract was to move from contract mining to owner mining for the project. “Essentially, all the work that Majwe has been doing is now internalised,” the official said. While Debswana officials could not readily confirm the length of the Majwe contract, it is reported that the agreement was due to have run for nine years after its original award in March 2019. Cut 9 will extend Jwaneng Mine’s lifespan to 2035 by deepening the open cast pit to 830 metres, from the current 650 metres. The project is scheduled to yield an additional 53 million carats of rough diamonds from 44 million tonnes of treated material.
Majwe Mining spokesperson, Archibald Ngakaagae, confirmed the latest developments but referred all enquiries to Debswana. Majwe Mining, a joint venture between Bothakga Burrow Botswana and Thiess Botswana, previously developed the P24 billion Cut 8 project which is the area presently producing diamonds at Jwaneng.
Cut 9, known as a legacy project designed to secure Debswana’s future, is due to create more than 1,000 jobs at its peak.
The project is amongst De Beers’ most important, as Debswana contributes up to 75% of its annual rough diamond production.