De Beers is expected to begin production at its Venetia underground project in South Africa this year, almost two years behind the initial commence date.
Construction of the underground project started in 2013 and first production was targeted or 2021.
Group spokesperson David Johnson told Rough&Polished's Mathew Nyaungwa in an exclusive interview that the targeted date for first production was revised mainly due to the impact of the Covid-19 pandemic on their workforce, heavy rain and supply chain delays.
The project seeks to transition the mine from an open pit to an underground operation, thereby extending the mine life by 23 years to 2046.
The underground project was projected to treat about 130 million tonnes of ore, containing close to 96 million carats.
At least 5.9 million tonnes of ore will be treated through the existing process plant to produce about 4.5 million carats of diamonds a year.
Meanwhile, Johnson said De Beers completed foundational work in Angola last year and had since established a joint venture (JV) partnership with the state-owned diamond mining company Endiama.
Below are excerpts from the interview.
How far have you gone with the Venetia underground project?
The project continues to make good progress, with a number of key milestones delivered in 2022.
What are these key milestones?
Two major milestones were achieved for the bottom of mine. The commissioning of the production shaft and phase 1 of the ventilation change-over, both achievements enabling a further ramp-up in development.
Continued to advance the operational readiness programme, which includes all aspects of people, systems, assets and process readiness for the underground operation. The training and transition of existing employees to the underground operation is also well advanced. There is also a concentrated focus on the recruitment and training of local employees.
When are you targeting your first production from this project?
The first production will occur later this year.
What caused you not to meet your initial target of first production in 2021?
The targeted date for the first production was revised due to a number of factors, most notably the impacts of Covid-19 on our workforce, excessive rain and supply chain delays.
De Beers signed two mining investment contracts last year with the Angolan government to prospect for diamonds in the provinces of Lunda Norte and Lunda Sul. You previously indicated plans to commence work before the end of 2022. Did you manage to do so?
Yes, foundational work was completed in 2022.
Can you provide an update on the work that you have done thus far in Angola?
Our two new legal entities have been incorporated and the joint venture partnership with Endiama has been established, with planning and operational readiness activities also completed. The start of field activities has been delayed due to the Angola national elections and the onset of the wet season.
How have you found the operating environment in Angola since your return?
We continue to be encouraged by the progress being made, including enhanced transparency within the diamond mining sector and the distinction of authority between the relevant government bodies. It was also pleasing to see Angola join the Extractive Industries Transparency Initiative (EITI) in 2022. We continue to work with the government in support of fostering an investment-friendly operating environment.
What are the chances of De Beers applying for more prospecting licences in Angola?
Our current focus is on completing the work programmes at our existing licence areas.
What is your projected state of the rough diamond industry this year?
If there's anything recent years have proved, it's that making predictions in an increasingly uncertain world is extremely difficult. After a record couple of years for consumer demand, the diamond industry is facing new headwinds, such as high levels of inflation in key markets, that could impact consumer demand during 2023.
However, we continue to be encouraged by the underlying strength of consumer desire for diamonds and the re-opening of China following Covid-19-related lockdowns.
As ever, we are monitoring the impact of these macro factors closely and will respond accordingly.
Mathew Nyaungwa, Editor in Chief of the African Bureau, Rough&Polished
