De Beers scouting again
Better policy climate prompts diamond miner to invest R30m to resume exploration in SA
De Beers has restarted exploring SA after a twoyear hiatus as new leadership at the department of mineral resources and a fresh Mining Charter encourage the search for new diamond deposits.
De Beers has restarted exploring SA after a two-year hiatus as new leadership at the department of mineral resources and a fresh Mining Charter encourage the search for new diamond deposits.
De Beers Consolidated Mines (DBCM), the local arm of Anglo American’s 85% held De Beers, is investing R30m this year as prospecting right applications are approved, said CEO Phillip Barton. DBCM has 32 prospecting permits and another 22 awaiting approval, he said in an interview at the Investing in African Mining Indaba.
While the news is good after the onerous regulations attached to exploration permits by former mineral resources minister Mosebenzi Zwane and difficulties in securing permits from the department, there is a more basic issue that has to be addressed. Mineral rights in SA are granted according to farm boundaries on the surface. Instead of granting an exploration company a large chunk of land to explore under a single permit, companies have to apply piecemeal.
In Botswana, which is often held up as one of Africa’s most progressive and investorfriendly mining destinations, exploration rights cover vast tracts but are strictly controlled, taking a use it or lose it approach to stimulate exploration spend and active searches.
While the exploration permits in SA, which Barton describes as “highly prospective” are a step in the right direction and the number seems impressive, the area covered by the licences is relatively small, making it more difficult to find geological anomalies.
However, Barton said DBCM’s exploration team has a century of data to draw on to identify potential hot spots.
DBCM has just one mine left in SA as it closes the opencast Voorspoed mine in the Free State, which is at the end of its life. No suitable buyer was found for the asset, despite 60 groups expressing an interest.
DBCM is forging ahead with its $2bn Venetia Underground Project, moving from an opencast mine to a deep-level mine in Limpopo.
Management has developed a plan to tackle the upper reaches of the mine instead of waiting for full underground production to start in 2024. By bringing forward underground mining by two years, albeit at a limited level from the top of the mine, it will fill the gap between stopping opencast mining and moving underground.
NO HIATUS
“In the next few years we are going to hit the top-of-mine development very hard to ensure we do not have a production hiatus,” Barton said.
Venetia produces 4.5-million carats a year, but despite keeping production levels through the plant steady at 5.9-million tons a year before 2024, diamond output is unlikely to match these levels because of a blend of fresh ore and lowergrade stockpiled material to feed the plant, Barton said.
Venetia is the third-largest source of diamonds for De Beers outside the Jwaneng and Orapa mines in Botswana. In 2018, Venetia’s output slipped by 8% to 4.25-million carats as the open pit started winding down.