Botswana Diamonds to begin production in South Africa

A test-run at Botswana Diamonds‘ (LSE: BOD) Marsfontein project in South Africa has positioned the company to begin commercial production at Thorny River later this year, it said on Thursday.

The company, which has faced challenges including plant delivery delays and adverse weather, said the proof of concept currently running at Marsfontein has provided key information for the development of Thorny River.

The project, located in the northern Limpopo province of South Africa, has produced multiple gemstones during exploration totalling 1,481 carats to date, with the largest stone recovered being a low quality/value 24.6 carat stone and other special (high value) stones. 

“Despite a slow start with equipment and weather issues, Marsfontein is delivering better than expected grades and diamond values,” chairman John Teeling said in the statement. “This augurs well for our adjacent Thorny River development, which is expected to commence in the latter half of 2023.”

In a January 2022 preliminary assessment of Thorny River’s kimberlite potential, the company estimated the asset hosted about 2 million tonnes of kimberlitic material, up from the 1.2 million previously determined.

It has also identified two areas of interest for commercial mining at the project. 

Slow in Botswana

Despite carrying the name of Africa’s top diamond producing country, Botswana Diamonds has not been equally successful in the landlocked nation. Earlier this year it was looking for a new joint venture partner to acquire the Ghaghoo mine in Botswana, which former owner Gem Diamonds (LSE: GEMD) placed on care and maintenance before selling it.

The main focus during the first half of the year was the attempt to acquire Ghaghoo but the company was unable to attract the interest of a party that could provide the required funds.

Botswana is Africa’s top diamond producer by value and the second biggest by production. 

Despite overall mining output from the country rising by 8.2% in 2022, the nation believes that gains in copper and coal will not offset the decline of its diamond sector. 

Diamonds have helped Botswana, unlike many of its neighbours, ascend into the ranks of middle-income nations with average earnings per person of between $3.11 and $37.93 a day.

Conditions should improve further once underground mining begins at Jwaneng, the world’s richest diamond mine. The operation is owned by Debswana Diamond, a partnership between De Beers and the Botswana government.

The world’s largest diamond miner by value and the African country agreed to a new diamond sales deal in June. The deal allows the government to gradually increase the share of rough stones it gets from the joint venture over the next decade to 50%.

Botswana President Mokgweetsi Masisi, who has been pushing for a bigger share of Debswana’s output, had threatened to sever ties with the mining company if the government’s concerns weren’t reflected in the new deal.