In a strategic move to secure its future in the ever-evolving diamond industry, De Beers, the world’s leading diamond producer by value, announced on Wednesday its commitment to invest $1 billion in the expansion of its flagship Jwaneng mine in Botswana. This ambitious endeavour aims to shift operations from the current open-pit model to a sophisticated underground mine, ensuring the long-term sustainability of one of the world’s richest diamond mines.
Despite challenging market conditions that saw a 20% drop in wholesale polished diamond prices in 2023, De Beers remains resolute in its vision. The joint venture between Anglo American and the Botswana government, known as Debswana Diamond, will spearhead this investment, primarily focused on establishing a drilling platform for kimberlite pipe sampling and crucial infrastructure development.
Initial groundwork for the Jwaneng underground project is scheduled to commence this May, with two subsequent phases, Phase 1 mining and Phase 2 mining, set to follow. This phased approach is designed to bolster long-term production and counteract the tightening global diamond supply.
De Beers’ CEO, Al Cook, expressed the significance of this move, stating, “The global supply of natural diamonds is falling, so moving forward with the Jwaneng underground project creates new value for investors.”
The Jwaneng mine, renowned for its unparalleled diamond value, has been a focal point of expansion since 2010. Debswana confirmed in 2018 that it was in the final stages of a $3 billion project aimed at extending the mine’s lifespan until 2024. Further investments were planned to keep the mine operational for an additional 11 years beyond 2024.
The Jwaneng underground mine is anticipated to yield up to 9 million carats annually, building on its impressive track record. Since its commencement in 1982, the mine has consistently produced nearly 11 million carats each year.
Debswana holds a vital role in Botswana’s economy, contributing approximately 20% to the country’s GDP. Furthermore, it is a cornerstone of De Beers’ operations, accounting for nearly half of the company’s annual diamond production.
Last year, after extensive negotiations, De Beers reached a landmark agreement with Botswana, paving the way for a new diamond sales pact. This agreement will gradually increase the government’s share of diamonds from the Debswana joint venture to 50% over the next decade, reaffirming the strong partnership between the two entities.
As De Beers sets its sights on this billion-dollar investment, it not only secures its foothold in the diamond industry but also fuels the economic prosperity of Botswana, ensuring a sparkling future for all stakeholders involved.
