- Cut 9 project to reach bottleneck in 2027, production of ore to start in 2029
- Debswana has invested over 15 billion in Cut 9 mine expansion project
- Underground project commences in 2024 with mining of waste, tunnel development
- Over P65 billion, expected cost of Underground project
- Jwaneng contribution to Debswana revenue stands between 74 and 80 percent
THE PROJECTS | MINE EXPANSION
Jwaneng Mine, the world richest mine by value, owned and operated by Debswana will continue to anchor both Debswana and De Beers revenue, following investment in key projects; the Cut 9 project and underground project.
In the first half of 2017, Cut-8 delivered its first ore for Jwaneng, catapulting the mine to ‘super-pit’ status. The cut 8 will come to an end in 2029, according to Debswana, paving way for mining of ore to begin at Cut-9.
Debswana, a 50-50 De Beers- Botswana Government joint venture has invested over P15 billion to catapult the mine life to 2035 with the Cut 9 project. Cut 9, is currently transitioning from outsourced contractor to in-house operation.
Cut-9 project, which commenced in 2019 will reach its bottleneck in 2027, two years before the end of ore production at Cut 8. The Jwaneng Cut 9 Project will extend the life of the mine to 2035 with 80% plant ore feed expected from 2029. Currently stripping of waste at Cut-9 is ongoing, with Naledi Mining Services, scheduled to take over the project in January 2023.
Meanwhile the underground development will commence in 2024 (development of tunnel/mining of waste). Production of ore will start in 2030. Jwaneng Mine underground project came into being, after it emerged that post Cut 9 business case evaluation paints a different picture which proves that no further open pit cutback will yield a positive business case for the mine. This resulted in the future of Jwaneng Mine being directed to underground alternatives.
Debswana intends to develop a safe and viable underground mine to sustain production of diamonds after Cut 9 open pit operations. It will be developed based on the latest proven technology, global benchmarks and full adherence to sustainability imperatives. This includes the journey to carbon neutrality for the organisation.
This operation, according to Debswana, will exploit resources at ever increasing depth, down to approximately 1000m below ground level, where significant diamond resources remain after Cut 9. It will use mass mining methods for the underground mine such as block-, sub-level and incline caving.
With the end of open pit operations, expected to be in 2032 when the current Cut 9 reaches its economic limit, the remaining diamond resources from the three kimberlite pipes (Centre, North and South) can sustain current production levels and further extend the Jwaneng mine life beyond 2050.
CONTRIBUTION OF JWANENG MINE
Jwaneng Mine, discovered in 1972, and started production in 1982, is the richest diamond mine in the world by value. The mine contributes between 74 percent and 80 percent of the overall Debswana revenue.
“It ranges between 74 percent and 80 percent because of the value of the diamonds that we mine. 40 percent of total De Beers production comes from Jwaneng. In total, Debswana diamonds represent 70 percent of the total De Beers production,” said Debswana Jwaneng Mine General Manager Koolatotse Koolatotse when giving the Jwaneng Mine business operations overview during a media tour recently.
Koolatotse said because of its 15 percent stake in De Beers, Botswana also earns revenue from De Beers production in South Africa, Namibia and Canada.
He indicated in its arrangement with De Beers, the Government of Botswana ultimately benefits 80.8 percent from Debswana diamonds revenue, while De Beers takes home only 19.2 percent.
He said this is due to Botswana’s 15 percent stake in De Beers, as well as revenue from royalties and tax.
NALEDI CUTS TEETH WITH JWANENG MINE CUT 9 PROJECT
Debswana is aiming to profit from its over 50 years of experience in mining by offering its service to mining companies beyond the borders of Botswana, including companies that are in the non-diamond mining industry.
Debswana will offer its services through its newly established subsidiary, Naledi Mining Services which was first introduced to the public in September at the company Business Seminar. Debswana Jwaneng Mine General Manager, Koolatotse recently said the decision by Debswana to establish Naledi Mining Services, was the best decision.
Naledi Mining Services’ first task will be taking over the contract which was initially serviced by Majwe Mining from 2019, until termination in 2021.
In January 2021, Debswana, announced termination of the Majwe Mining Cut 9 contract. By the time of termination, the contract had run for 18 months since April 2019 and the initial contract duration was nine years being from 2019-2027 worth P15.7 billion.
Majwe is a joint venture between Australian Mining company- Thiess (70 per cent) and long-term local partner Bothakga Burrow Botswana (30 per cent)- which was expected to provide full scope mining services over nine years, including drill and on-bench services, mine planning, equipment maintenance, load and haul, and mining operations.
Koolatotse said, when they realised as Debswana that the partnership with Majwe Mining was not the best way to go, a decision was taken to terminate the contract.
“Immediately when we terminated the contract, P3.6 billion went to the shareholders’ pockets,” Koolatotse said when giving business overview during a Jwaneng Mine media tour.
The decision to cut ties with Majwe saw Debswana insourcing the services offered by the contractor, and ultimately resulted in the establishment of Naledi Mining Services.
Naledi Mining Services which will undertake the Jwaneng Cut 9 project from January 2023 and provide mining operations skills; these are machine operators, truck operators, shovel operators, supervisors, as well as earth moving equipment repairs and maintenance.
Naledi will have initially have an employee population of about 750 people, with an annual turnover of P300 million.
Koolatotse said Naledi Mining Services, which is a 100 % owned subsidiary of Debswana, will also be involved in offering mining services beyond the borders of Botswana, and in mining other minerals besides diamonds.
“Debswana specializes in mining diamonds in Botswana. However, because we are the benchmark, we have been visited by other countries, and after seeing what we do, they asked if we can help them to mine,” Koolatotse said
KK, as known in mining realm, said the request created opportunity for Naledi which unlike Debswana, it does not specialize but provide mining services, across all minerals including copper or platinum among others.
“Naledi was the best decision for Debswana to make,” said Koolatotse.
He said the intention of Naledi is to accelerate the development of mining services in Botswana, by creating opportunities for citizens owned companies to offer their services to the company as subcontractors.
He said, in the past, contractors who were engaged by Debswana to offer mining services subcontracted other companies to provide certain services, such companies which were foreign as well.
However, with Naledi the opportunity will be given to citizen’s companies as part of it Citizen Economic Empowerment Programme (CEEP). CEEP is an initiative aimed at repurposing Debswana supply chain and development of citizen participation in mining activities. The initiative will create and deliver shared citizen spend value of P20 billion and 20 000 jobs by 2024.
So far, since the commitment was made in 2019, Debswana has spent over P11 billion on citizen companies, with service such as drilling, tyre management, mine equipment leasing, and crushed rock being done by local companies.
ALIGNMENT OF TENDERS WITH OPERATIONAL AND CEEP REQUIREMENT
In 2019, Debswana announced its commitment to delivering shared citizen spend value of BWP20 billion and 20 000 jobs by 2024. The development has seen the diamond mining company shifting from international companies to local companies, coupled by capacity building and support systems that has ensured that local companies do not fail. Debswana has announced partnerships with local commercial banks to provide funding to Debswana suppliers and contractors.
Below are the services that are now provided by citizen companies:
|Drilling||100% Citizen Contractor in Place|
|Crushed rock||100% Citizen Contractor in Place|
|Transport/Bussing||100% Citizen Contractor in Place|
|Hospitality||100% Citizen Contractor in Place|
|Security||100% Citizen Contractor in Place|
|Tyre Management||100% Citizen Contractor in Place|
|Mining Equipment leasing||100% Citizen Contractor in Place|
|Catering||100% Citizen Contractor in Place|
|Landscape||100% Citizen Contractor in Place|
|Camp Clinic||100% Citizen Contractor in Place|
|Explosives||Contract in place (CEEP Transition plans advanced|
|OEM Contracts||100% Citizen Contractor in Place|