Mining giant confident about future of diamond market
Soon after shutting its Snap Lake mine in Canada‚ De Beers has officially opened its new Gahcho Kue mine in the country.
The operation, near the Arctic Circle in Canada’s remote far north, is described as the largest new diamond mine to open in 13 years.
De Beers is the 51% owner of the $1-billion (R13.7-billion) mine‚ which it shares with Toronto-listed Mountain Province Diamonds.
The open-pit mine will reach steady-state operation in the first quarter of next year.
“Allied to our major investments in production capacity expansion in the Southern African region‚ the opening of Gahcho Kue positions De Beers and its partners strongly to capitalise on the industry’s positive demand outlook‚” De Beers chief executive Bruce Cleaver said.
It was the largest diamond mine De Beers had built outside Southern Africa‚ he said.
The remote mine‚ which requires most of its 530 staff to fly in and out on a two-week rotation‚ is slated to generate 54-million carats over its life.
De Beers is 85% owned by Anglo American and is one of three “consumer -facing” products the diversified miner is keeping in its portfolio as it sheds bulk commodities like coal‚ iron ore and manganese to repay debt‚ cut costs and focus on diamonds‚ platinum and copper.
De Beers stopped the loss-making Snap Lake mine and sold its Kimberley tailings retreatment project in South Africa to adjust its production to meet reduced demand for rough diamonds last year and to stop unprofitable or marginal production.
It has also suspended diamond output at parts of its Orapa mine in Botswana.
The company is investing about R20-billion at its opencast Venetia mine near Musina to develop an underground mine.
It is nearing the end of mining at its Voorspoed mine near Kroonstad.
De Beers also has other mines in Botswana‚ and operations in Namibia and is the world’s largest producer of rough diamonds by value.
Russia’s Alrosa is the largest source of diamonds by volume. At the opening of the Gahcho Kue mine, Cleaver said the start of operations was very significant for the company.
The mine’s name is derived from a term for “big rabbit” in the indigenous Chipewyan language.
The Gahcho Kue mine is the sixth to open in Canada in the last two decades, making the country the world’s fifthlargest diamond producer in terms of volume and third in value, with more than $1.5-billion (R21-billion) in annual exports.
Cleaver predicted that consumer demand for diamond jewellery would provide medium to long-term growth.
However, production is waning as diamond sales have been hampered by an economic slowdown in China and ongoing turmoil in global financial markets.
Total sales have fallen two per cent last year to $79-billion (R1.1-trillion).