Looking back, what have been some of Debswana’s greatest milestones?
Milestones include the the commissioning of the Jwaneng Aquarium in 2000, which was the first of its kind and attracted immense global interest from the diamond industry, thereby promoting Debswana’s leadership in applying cutting edge technology.
Over the years Debswana discovered numerous large stones from its mines, key amongst them being a 446 carat diamond in 1993, a 40.11 carat blue diamond of exceptional clarity in 2018 from Debswana OLDM mine, named the “Okavango Blue”, and recently in June 2021, Debswana Jwaneng mine recovered the largest high quality gem diamond in the mine’s history weighing 1,098 carats, also the third largest gem quality diamond to be discovered worldwide.
Debswana prides itself as a direct contributor to Botswana’s development. Our CSI history in the mining communities tells a positive story of a company that successfully delivered on its purpose. Debswana has funded infrastructure development and many community projects in the zones of influence ranging from health, education, environment, sports development, and arts and culture.
Can you give an update on production and development plans for your assets?
During 2021 Debswana has successfully retired Orapa mine plant 1 and placed Damtshaa mine under care and maintenance until further notice. Plant 1 has been operational since the inception of the mine in 1971. Its closure is driven by the cost of keeping it safely operating as well as the opportunity created by the planned further expansion of the more modern and efficient No. 2 plant.
Externally, the ongoing market challenges and diminished revenues as a result of the global economic recession induced by COVID-19 have further prompted Debswana to accelerate the implementation of its transformation program.
In Jwaneng, a successful transition of the Cut 9 Waste Mining from Contract by Majwe Mining Joint Venture (MMJV) to Hybrid (Owner with some services outsourced). This was reached though a handshake between Debswana and Majwe Mining on April 04th, 2021. The Cut 9 contract is a waste stripping project that started in 2019 and is expected to end in 2027, extending Jwaneng life of mine to 2035. The transition has been smooth, and no safety incidents have been recorded.
Concerning the widely reported US$6 billion deployment to the Jwaneng underground mining project, it is important to note that this amount is an estimate, and that the project is still at pre-feasibility study.
How did you overcome the challenges posed by the pandemic?
When WHO declared COVID 19 as a Global Health pandemic, Debswana, in collaboration with the Government of Botswana and De Beers, reviewed risk management programs and incorporated COVID 19 risks and controls. In addition, Debswana contributed a total P25 million towards vaccine sourcing and rollout.
The diamond industry suffered, however, Bain & Consulting reports that the industry fared better compared to other personal luxury markets. The 15% to 33% decline in revenues estimated by Bain was however furthering a downward trend from the 2017 peak. While the diamond industry hasn’t recovered to its recent peak years, 2021 has seen great improvement when compared to the 2020. The first half of the year experienced strong demand. The increased confidence in the market was driven by the US and Chinese demand for both rough and polished goods. Demand is rising for both the European and Indian markets. While COVID 19 remains a global challenge, the positive sentiment in the diamond market is expected to be sustained for the remainder of the year with vaccination expected to play a positive role in the recovery.
How would you characterize the overall health of the mining industry in Botswana?
The Index of Mining Production stood at 74.4 during the first quarter of 2021, showing a negative year on-year growth of 12.0%, from 84.6 registered during the first quarter of 2020. The main contributor to the decline in mining production came from the diamonds sector, which contributed negative 11.7%. The decrease was a result of weaker trading conditions mostly linked to Covid-19 protocols restrictions. Soda ash was the only positive contributor in the mining production, however, its contribution was insignificant to offset the negative contribution from diamonds. The quarter-on-quarter analysis shows an increase of 16.3% from the index of 64.0 during the fourth quarter of 2020 to 74.4 observed during the first quarter, indicative of an improvement as we move into 2021.