Mining gets better and better. (Botswana).
After a doubling of the capacity at Orapa in 1999, Debswana's main development the following year was the installation of the Aquarium plant at the Jwaneng mine, the jewel of Botswana's mining sector. 11.5m carats - 80% of them gem quality with a value of $108/carat were mined.
This brand new technology improved the recovery rate of diamond material through a complex process using high corrosion chemicals, magnetic separators and X-Ray machines. "We don't expect the sales level to be as good as 2000 in 2001. But as far as output goes, in 2001 we achieved our targets", commented Jwaneng's Seb Seberlela. The output for 2001 was more or less equivalent to the previous year at over 24m carats, worth $2.13bn. A similar amount is expected this year.
Although the current world economy does not encourage large expansion projects, Debswana is keen on further improvements on the extraction front. Next October, a new mine will come on stream at Daamtscha, near the huge Orapa complex. For a total investment of about $40m it is expected to produce around 250,000 carats of gem quality stones annually for 30 years.
New surface crusher
At Jwaneng the main improvement will be the installation by the end of the year of a $100m new surface crusher with a 3,000 tons/hour capacity - representing a 50% improvement on the current unit. This new unit will be positioned to reduce the cost of trucking the ore because, as the open-cast pit gets deeper, the distance to the old crushing plant gets longer. Debswana is also purchasing new trucks of 240 tons capacity, to replace the current ones which can only carry 150 tons. This will reduce the number of vehicle rotations and "stops the cost from getting out of hand" explained Sebetlela.
Similar improvements are planned at the other two mines of Orapa which produced 12.15m carats worth $47/ct in 2000, and of Letlhakane where the output was less in volume but higher in value 960,000carats at an average value of $191 per carat.
Botswana is likely to remain the number one world producer in terms of value at the lowest cost. Sebetlela is reluctant to disclose to African Business the exact cost of extraction per carat, but he says that reserves are sufficient to allow a 30 years open pit exploitation both at Jwaneng and Orapa to a depth of 250 meters, and perhaps 20 more years of additional underground exploitation.
Not a monopoly
Although Debswana does not retain production monopoly, the company is likely to remain Botswana's sole diamond producer for quite a while to come. So far, over 50 exploration licenses of up to 1,000 sq km each have been issued. But for every diamond-bearing pipe, there may be 200 with nothing in it. Hitting a vein as rich as Jwaneng is very, very rare indeed.
Responding to allegations from the London-based Survival International that the government's will move some 400 bushmen out the Central Kalahari Game Reserve (CKGR) to make way for new mining operations, a De Beers spokesperson said that although exploration had taken place at Gape, in the CKGR, there were no plans to begin operations. He insisted that "no mining is raking place, no mining is planned for the foreseeable future, an the potential returns on investment do not make it viable to go ahead in the present economic climate".
Mindful of its socio-economic responsibilities, this year Debswana is increasing efforts to reduce the impact of Aids on the labour force. "We also feel that we needed to be effective in delivering the message of conflict-free and environment-friendly diamonds to the world," Sebetlela added.
SODA ASH AND COAL
Botswana Ash (Botash), 51% Downed by the government and 21% by Anglo American, has achieved ISO9002 certification for its environmental protection. The company feels this will help to safeguard its position as the leading supplier of soda ash and salt in the region.
Botash's managing director, Derek Cochrane, wants to increase output from the current levels of 200,000 tons a year of soda ash to 300,000 tons. The government is considering investing in refining facilities to offer a purer soda ash to compete with major international producers, explains the permanent vice-secretary of the Ministry of Mineral Energy and Water Affairs, Kago Moshashane. But no decision has been made yet.
Coal production from Debswana's (93%) Morupole Collieries, currently just less than one million tons a year, could also increase in the near future. This will depend on the decision expected by end 2003, from the board of the Botswana Power Corporation (BPC), to build two more coal-fired plants to provide a combined 240 MW generation capacity. The entire coal production is used for power generation, mainly by the BPC, and to a lesser extent by Botash and the copper and nickel corporation Bamangwaro Concessions Ltd (BCL).
However, Moshashane is confident that BPC will go ahead with the expansion project. At the moment, more than half of the power used in the country is supplied from by the Southern African Power Pool (SAPP).
Moshashane explained: "If you look at the rate at which they are connecting in SA and here in Botswana, there will not be surplus power by 2007, even if we put into the equation power supply from the DRC to the SAPP. Therefore we are going to need more generation. There has to be an expansion of one plant somewhere." In such a case, Morupole Collieries' huge reserve of 8bn tonnes of steam coal could be a determining factor in the equation.
COPPER AND NICKEL
The future of the copper and nickel mines of Selebi, Selebi North and Phikwe, about 350km North East of Gaborone, run by Bamangwato Concessions Ltd is less certain. The Botswana government, which holds a 35% stake with Anglo holding 23% in the enterprise, has engaged a consultant to look at various options.
These range from closing the operations to beefing up investment to increase the profitability of the company which, in addition to treating its own ore, toll-smelts concentrate and ore for Tati Nickel.
Tati Nickel is owned by Anglo (43.35%), LionOre Mining of Canada (41.65%) and Government (15%). It produced about 62,000 tons of ore in 2000 containing 20,977 tons of copper, 24,218 tons of nickel, and 319 tons of cobalt. The production was shipped to Norway and Zimbabwe for refining.
Despite lower world nickel prices, Anglo and LionOre are still committed to investing $62.5m in doubling refined nickel production at Tan to 12,500 metric tons per year. The project, due for completion this year, will involve expansion of the open pit, installation of a 3.6m ton per year wet concentrator, and construction of a 43-km water pipeline from the Shashe Dam to the Phoenix Mine.
But BCL is indeed going througha tough patch, admit Ministry sources who are also concerned with Anglo's abrupt withdrawal from KMC in Zambia. However, Botswana's bargaining power might be stronger than Zambia's.
"You don't look at the industry as a particular commodity. Anglo is not involved in Botswana in copper and nickel only. So, you have to take the holistic view", explained Moshashane.
In other words, Anglo would have also have to consider the considerable advantages the group enjoys in Botswana.
The situation at the Phoenix and Selkirk mines operated by Tan Nickel is less uncertain. By products such as gold, palladium, platinum, and silver are recovered from these operations.
Meanwhile, Gallery Gold, whose main shareholder is Australia's Lion Selection Group, has just reassessed the reserves at Mupane, near Francistown. According to the company, they amount now to one million ounces instead of the 557,000 oz previously estimated.
The management is currently awaiting results of a preliminary economic survey, to be followed by a feasibility study, and hopes to start operations by 2003. However, the estimated at $26m costs could only be justified if other resources such as platinum and palladium were present.
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|Date:||Apr 1, 2002|
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