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De Beers Commits $2B for Underground Mine at Venetia

Feb 14, 2013 5:16 PM   By Jeff Miller
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RAPAPORT... The De Beers Group of Companies announced it will invest approximately $2 billion (ZAR 20 billion) to build a new underground mine beneath the currently operating open-pit Venetia diamond mine in Limpopo Province, South Africa. When completed, the new underground mine will extend the life of Venetia until 2042 and replace the open pit as South Africa’s largest diamond mine, according to the company. De Beers has received final regulatory clearances earlier this month.

The development and build phase of the underground mine is expected to create 1,000 jobs over the next nine years while open-pit mining operations continue. Underground operations will begin production in 2021, yielding approximately 96 million carats during the life of the mine and securing more than 3,000 jobs, the company contended.

The project will employ semi-skilled and skilled workers, drawn primarily from the region and trained for the project, who will mostly acquire  technical skills that will enhance the country’s technical skill resource base. The bulk of all equipment and services will be sourced in South Africa.

Philippe Mellier, De Beers Group CEO, said, “Our investment in Venetia enables us to provide greater certainty around long-term supply for our sightholders, particularly those with manufacturing operations in South Africa. Our sightholders have significant investments in the local cutting industry and this new underground mine will provide a large and predictable supply of rough diamonds for decades to come.

“It is fitting that De Beers is celebrating its 125th anniversary this year. From our founding in Kimberley in 1888 to today’s announcement at Venetia, South Africa has always been the ancestral heart of De Beers. It is gratifying that today’s announcement means that De Beers will remain South Africa’s leading diamond company until at least our 150th anniversary,” Mellier said.

Barend Petersen, the chairman of De Beers Consolidated Mines (DBCM), added, “We see this significant capital investment as another concrete example of our commitment to the South African mining industry, an industry on which the South African economy was built following the discovery of diamonds in 1866. Almost 150 years later, the country is a diverse economy, while mining remains an integral part of the aspiration to build a more prosperous and equitable South Africa.”

Phillip Barton, the CEO of DBCM, said, “The De Beers Venetia underground project team have been assessing the safest and most economic options to extend the mining operations at Venetia mine and unlock the extensive ore reserves beneath the open pit. Venetia will play a major role in the future of De Beers and we have therefore been preparing for years to meet tight deadlines and high standards so that Venetia Underground is ready to begin producing South African diamonds by 2021.”

The Venetia mine underground project was approved in 2012 by the boards of both De Beers and parent company Anglo American. Environmental authorization was granted in July and the Environmental Management Plan was approved by the Department of Mineral Resources in October.

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Tags: De Beers, diamond mine, Jeff Miller, South Africa, venetian
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