Debswana ends $1.3bn contract for Jwaneng Mine extension
Debswana Mining Company, owned by De Beers and the Botswana government, has terminated a $1.3 billion contract with a unit of Australia’s Thiess to extend the lifespan of its Jwaneng diamond mine, and will carry out the project in house.
Debswana, one of the world’s largest diamond producers, declined to provide a reason for ending the contract for the extension project – known as Cut 9 – which was awarded to Majwe Mining in 2019. Theiss has a 70 percent shareholding in Majwe Mining, alongside its long-term local partner Bothakga Burrow Bostwana, which owns 30 percent of the joint venture.
The nine-year extension project is expected to extend the life of Jwaneng – Debswana’s flagship mine – to 2035, and ensuring continuous production, while yielding an estimated 53 million carats of rough diamonds from 44 million tonnes of treated materials.
“The Cut 9 operation will transition to an owner-mining operation, with some of the key services and resources, such as labour, being provided by contractors/service providers to Jwaneng Mine,” Debswana’s head of corporate affairs, Rachel Mothibatsela, said in a statement.
The Botswanan firm had originally signed a $1.31 billion contract with Majwe Mining for the extension project for the mine, which consists of three separate volcanic pipes, with production varying from approximately 12.5 to 15 million carats per year, according to mining plans.
Jwaneng is considered to be the richest diamond mine in the world by value. It became fully operational in August 1982. It is considered to be Debswana’s flagship mine due to substantially higher dollar per carat obtained for its gems. The mine contributes about 60-70 percent of Debswana’s total revenue.
The extension project contract was awarded following Majwe’s successful completion of the Cut 8 project in November 2018. The joint venture was 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.
At the time, CIMIC Group Chief Executive Officer Michael Wright said: “This new contract strengthens Thiess’ presence in Botswana and builds on our operational and technical teams’ solid performance at Jwaneng since 2011.
“The relationship developed between Majwe and client Debswana Diamond Company, owned by the Botswana Government and De Beers, is a testament to all involved with the project.”
Debswana is spearheading the implementation of a grid tied solar PV plant at Debswana Corporate Centre (DCC) in Gaborone, with the aim of contributing to the reduction of the company's carbon footprint.
This initiative is in line with Debswana's strategic intent of the prudent use of natural resources. In addition, this aligns with Botswana's Vision 2036 pillar on sustainable environment and Sustainable Development Goal (SDG) number seven, which calls for the expansion of infrastructure and upgrading of technology to provide access to sustainable and clean energy sources.
Lynas revenue jumps 21% as rare earth prices jump
Australian miner Lynas Rare Earths posted a 20.6% rise in revenue in the March quarter as selling prices for the key metals it mines hit record highs amid strong demand, particularly for neodymium and praseodymium (NdPr).
NdPr is used in magnets for electric vehicles and windfarms, in consumer goods like smartphones, and in military equipment such as jet engines and missile guidance systems.
The company said it plans to maintain production at 75% however, as it seeks to continue to meet covid-19 safety protocols and grapples with shipping difficulties. Shares in Lynas fell 6.1% after the results.
“They have faced a few logistics issues, and it would be good to know when they are going to start lifting their utilisation rates a bit,” said portfolio manager Andy Forster of Argo Investments in Sydney.
“Pricing has been pretty strong although it may have peeled back a bit recently. I still think the medium, long-term outlook is pretty good for their suite of products.”
Lynas post ed revenue of A$110mn ($85.37mn) for the three months to the end of March, up from A$91.2mn a year earlier as prices soared.
It said its full product range garnered average selling prices of A$35.5/kg during the March quarter, up from $23.7 in the first half of the financial year. “While the persistence of the covid crisis, especially in Europe, calls for careful forecasts for our business ahead, we see the rare earth market recovering very quickly,” said Lynas, the world’s largest rare earths producer outside China.
Freight demand has spiked during the pandemic, while the blockage of the Suez Canal in March delayed a shipment to April.
Lynas’ output of 4,463 tonnes of rare earth oxide (REO) during the quarter was marginally lower than 4,465 tonnes from a year earlier.