Mining companies in South Africa forced to dig deeper as De Beers presses ahead with $2bn underground mine
De Beers, one of the world’s largest mining companies, is digging deeper in a bid to combat the ever growing difficulty of diamond mining in South Africa.
The company are constructing a new $2billion mine underneath the already existing 450m deep Venetia mine, close to the border with Zimbabwe and Botswana.
Converting from an open pit mine to an underground mine 1,000m below ground, the Venetia mine is predicted to become one of the world’s five biggest diamond mines following its completion in 2022.
The decision to dig deeper to exploit the diamond rich site highlights something of a gamble for De Beers, but a gamble that could pay off quite substantially according to Ludwig Von Maltitz, De Beers Venetia GM.
“Worldwide, the easier diamond sources have probably been found, but with this resource here, we hope we have something we can extend well into the future,” he said.
This optimism is not matched by others in the industry as the price of diamonds has fluctuated tremendously over the last eight years, something that De Beers has suffered from – closing down two of its mines in Canada and Botswana in 2015.
Peter Major, mining specialist at Cadiz Solutions in Johannesburg, believes that De Beers’ new project is “stupendous”.
“We are often told that the growing world population, combined with the increasing difficulty of finding diamonds, will mean prices will always rise, but we will see. The project at Venetia is stupendous – especially as very few other firms are investing in SA,” he said.
Despite the uncertainty in the market, Venetia is expected to operate until at least 2043 – with belief that it could be operate even longer.
“If we can do it well enough, I can’t see why mining should not be a lucrative business going forward.” Said Mr Maltitz.
Read the May 2016 issue of Mining Global magazine.
Zimbabwe targets £8.8bn mining industry by 2023
Zimbabwe’s government plans to fast-track exploration, evaluation and digitalisation of selected reserved mining areas under the Ministry of Mines and Mining Development as part of wider measures to achieve a £8.8 billion mining industry by 2023, according to a senior government minister.
Information Minister Monica Mutsvangwa said other plans include stopping the issuance of special grants in the reserved areas under the Ministry of Mines and Mining Development until the exploration and evaluation is complete and a robust value addition program for diamonds is implemented.
Mutsvangwa was speaking at a post-cabinet media briefing on December 15.
She adds that the issuance and renewal of special grants for energy should also be based on the financial and technical capacity to value add all types of coal, as well as for ideal exploration of Coal Bed Methane.
For renewal of special grants, consideration should take into account the period the Special Grant has been held as well as plans with milestones for value addition of the special grant, Mutsvangwa says. She adds that the Zimbabwean government expects gold to drive the mining sector in order to achieve the ambitious target, with the precious metal expected to contribute approximately £2.96 billion to the overall target.
Mining is one of Zimbabwe’s major contributors to its economy, alongside agriculture, which is the mainstay. The mining sector accounted for more than 60 percent of the country’s foreign currency receipts in 2019, and contributed around 16 percent to national Gross Domestic Product, the Chamber of Mines says.
The country’s mining industry is focused on a diverse range of small to medium mining operations. The most important minerals produced in Zimbabwe include gold, asbestos, chromite, coal and base metals.
Zimbabwe expects its economy to expand by 7.4 percent in 2021 from a projected contraction of 4.5 percent this year, due to the effects of drought and the COVID-19 global pandemic.
When presenting the 2021 National Budget in November this year, Finance and Economic Development Minister, Professor Mthuli Ncube, said that the mining sector is projected to rebound by 11 percent next year after surviving a COVID-19 induced shock that saw the sector contract by 4.7 percent in 2020. In September, mining bans in national parks were introduced, according to news agencies.
He added that the National Budget would allocate £1 billion towards the operations of the ministry for planning, promotion and exploration, data capturing, and automation, among other key mining processes.
Other factors necessary for the achievement of the £8.8 billion target include a stable macroeconomic environment, policy consistency, and availability of long-term capital to fund mining projects along the entire mineral value chain, the minister said.
Stopping "illicit financial flows" from gold smuggling is another key issue to address, according to media reports.