Resource World Magazine

26 www.resourceworld.com F E B R U A R Y / M A R C H 2 0 1 5 B otswana is sometimes called "the world's best diamond address," which is a well-deserved tagline; the country is the largest producer of carats by value, while its royalty and tax regimes are both clear and competitive. In addition, the country's mining code is also reliable and long-established. The stars of the Botswanan show are undoubtedly the world-class Orapa and Jwaneng open-pit mines. However, there are ghosts at this banquet: electricity costs have risen 11% per year between 2002 and 2012, while labour costs have grown 14% per year in the same time- frame, according to De Beers' 2014 Diamond Insight Report. Diamonds represent just over 25% of Botswana's national GDP, although the government is keen for the sector to diversify and add greater value within its borders. In this regard, De Beers has noted that developing a sustainable cutting and polishing industry will require further government investment and an increase in competitive productivity. The develop- ment of the sales chain within Botswana made a notable leap forward in November 2013 with the relocation of De Beers' Global Sightholder Sales to Gaborone. The majority of De Beers' rough diamond avail- ability is now sold via Botswana. The timing is fortuitous as the diamond market has performed well over recent years and is expected to do so again in 2015. For example, Investec Securities analyst, Marc Elliot, was recently reported as say- ing he expects rough diamond prices to rise between 7% and 8% across 2015. Central to the improved performance has been the growth in China's diamond-based jewellery sales. For example, in 1994 below 1% of brides in a major Chinese city received a diamond engagement ring; by 2012 that fig- ure had risen to almost 50%, a percentage set to continue growing. Similar trends are being tracked in other developing econo- mies, all of which will be music to the ears of Botswana's government and producers. anglo american Plc. [AAUKY-OTC; AAL-LSE; AGLJ-JSE; Botswana, Namibia, Swiss] has an 85% stake in De Beers, while the government of Botswana holds the remainder. The company's Botswana footprint is extensive and it operates the Orapa, Letlhakane, Damtshaa and Jwaneng open-pit diamond mines through Debswana, a 50-50 joint venture with the Botswana government. Production for all four operations totalled 6,224,000 car- ats for Q3 2014, which compares with an output of 6,266,000 carats for Q2. Work at Jwaneng to extend the mine's life to around 2031 continues. Botswana Diamonds Plc. [BOD-AIM; Botswana] is an exploration and devel- opment company focused on the Orapa region. The company has a joint-venture agreement with diamond senior Alrosa, the companies are currently focussed on the PL117 target in Orapa through their 50-50 subsidiary Sunland Minerals. On October 2, the company announced drill results for two holes each on anomalies AN117/1 and AN117/2 at PL117. No kimberlites were identified for AN117/2 but the two AN117/1 bore holes intersected brecciated rocks with veins likely to be kimberlitic in origin. Botswana Diamonds holds a suite of other licences in the Orapa region and has joint-ventured 13 licence blocks in the Gope region with Brightstone, which can earn a 51% stake by undertaking explora- tion valued up to $940,000 within three years. Gem Diamonds ltd. [GEMD-LSE] holds the Ghaghoo underground diamond mine through its subsidiary Gem Diamonds Botswana. The operation was officially opened on September 5. Challenges encountered in the development of the decline, including a significant ingress of water, have been overcome. Production is now ramping up, with the company announcing that just over 4,000 carats had been recovered by the end of Q3, with first sale planned for February 2015. Ghaghoo's probable reserves stand at 7.5 million tonnes for 2.08 million carats contained. Kimberley Diamonds ltd. [KDL- ASX] secured the Lerala diamond mine in northeast Botswana in 2013 through its acquisition of Mantle Diamonds Ltd., Diamond mining in botswana: it doesn't get any better by Simon Rees MINING One of the numerous large diamonds recovered at Lucara Diamond's Karowe Mine in north-central Botswana. This rough diamond weighs 140.69 carats. Photo courtesy Lucara Diamond Corp.

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