"He also indicated that two other projects"Evidence of mine-sector transformation, says Minister November 2006
https://www.miningweekly.co.za/min/news/thisweek/?show=96325
Near the end of this article is the following paragraph: New MD Gareth Penny, who replaced Gary Ralfe at the helm of the group, has sanctioned two major projects in Canada, one in Botswana, three in South Africa and one in Namibia. He also indicated that two other projects were close to approval: the AK6 joint venture with African Diamonds in Botswana, and the Gahcho Kue prospect in Canada.
Evidence of mine-sector transformation, says Minister
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New Minerals and Energy Minister Buyelwa Sonjica has declared another new-order rights recipient as a 'model'.
This time De Beers Consolidated Mines' (DBCM's) empowered diamond-mining project, the new R1,2-billion Voorspoed.
“It's one of those good models and evidence that transformation is happening in the South African mining industry,” Sonjica declared at the sod-turning ceremony in the Free State.
Her comment came against the background of industry criticism of slow granting of new-order rights by the Department of Minerals and Energy (DME).
“I am particularly happy that so many stand to benefit,” she said of the Voorspoed empowerment transaction, “the company, the local people, workers and, most important of all, the South African economy.
“The regulators will be working side-by-side to see that the project is the success that it needs to be,” she promised. Voorspoed does have transformation written all over it.
It is DBCM's first mine as a black-empowered stand-alone company; it is DBCM's first new mine while a black MD has been at the helm; and it is also its first mine that ensures structurally that cash is put in to the hands of members of the community, women, the disabled, employees and pensioners, through their respective empowerment groups.
There is a local economic development plan, a local business development programme, social investment programmes and a plan to foster procurement from local people.
The black-owned company Ponahalo has 26% of DBCM, with broad-based empowerment groups owning one half of Ponahalo and the other half owned by a consortium of business groupings led by former Northern Cape premier, a former union official and former De Beers employee, Manne Dipico, who is Ponahalo chairperson, and former South African ambassador to London, Cheryl Carolus.
Dipico emphasises Voorspoed's business plan that, he says, seeks to foster local procurement of goods and services wherever economically viable.
Life-of-mine operating expenditure is estimated at R2,9-billion, which includes more than a billion-rand expenditure in the region.
“The mine epitomises our approach of partnership with government, with communities and ensuring that diamonds work for good,” Dipico says.
An estimate of expenditure into the local economy during construction is R45-million. An additional R15-million will be spent with local suppliers on turnkey projects.
It is also a mine that delights Free State premier Beatrice Marshoff, whose province has suffered a dramatic drop in the contribution of mining to the Free State economy, from 22% down to the current 9,9 %.
Moreover, it is an adrenalin rush for Nicky Oppenheimer, who, believe it or not, has never before opened a new diamond mine as De Beers chairperson.
He recalls his late grandfather, Sir Ernest, and his late father, Harry, speaking of the occasional large and exotic-colour diamonds from Voorspoed, where mining ceased in 1912.
Now, 94 years later, activity has returned to the mine that will be designed and built for DBCM by contractor Murray & Roberts, whose CEO Brian Bruce tells Mining Weekly that his company will develop Voorspoed as part of an alliance in which it will share both financial “pain and gain”.
The turning of the first sod alongside a derelict 35-m-deep open-pit follows hot on the heels of the DME's granting DBCM new-order mining rights for Voorspoed.
Full production is scheduled for mid-2009.
DBCM will be looking to do a lot more prospecting in South Africa and Oppenheimer gave notice of the company's intention to seek more prospecting rights, which is excellent news as the impression is often created that South Africa is mined out.
As part of its search for diamonds, De Beers has hired a Zeppelinairship to undertake gravity gradiometer surveys and is developing technology further tobe able to be as effective from fixed-wing craft.
Sonjica and Marshoff are correct to show enthusiasm for local investment because South Africano longer has the endowment of countries like the Democratic Republic of Congo and Angola, where more than half of De Beers' exploration budget is being targeted.
Even the South Africa of 100 years ago was not as well endowed as these two countries, today's geologists report, and Voorspoed itself is going to require ingenuity to turn to proper account.
Effort to secure economic viability is also having to be made at DBCM's Cullinan, Namaqualand, Kimberley and Oaks operations.
Largest since Venetia
Voorspoed is DBCM's largest South African project since the flagship Venetia in the 1980s.
Situated 35 km north-north-east of Kroonstad, the Voorspoed area contains 12,5 ha of diamond-bearing kimberlite pipe, from which some three-million to four-million tons of material will be obtained a year, yielding 600 000 ct to 900 000 ct a year from an openpit.
Grades are expected to be between 20 ct and 25 ct for every 100 t and life-of-mine between 12 years and 16 years.
Some 700 jobs will be created during construction and 400permanent jobs will be created as the mine reaches full production.
“I am very pleased to announce that construction of the mining plant will begin immediately,” says DBCM MD David Noko.
“The Voorspoed kimberlite is a marginal resource and this project has called for innovation and inspiration by engineers and all the project teams,” he reports.
Voorspoed will be of similar size to Letlhakane in Botswana, which is owned by Debswana, the partnership that De Beers has with the government of Botswana. Letlhakane is the second-smallest diamond mine in Botswana after Daamtsha.
Voorspoed was discovered as long ago as 1906 and acquired by DBCM six years later, but left unmined because of its extremely hard kimberlite, from which diamonds could not be liberated using the crushing technology available at the time.
After a long period of closure, sampling reoccurred in the 1960s under old mine levels, placing it on a back burner until the results of additional new-millennium work and advances in crusher technology created new interest.
While there is no hardness problem with Voorspoed's yellow kimberlite layers close to the surface, there is with the lower blue ground.
Use of high-pressure crushers will be required, Voorspoed operations manager Andy Taylor tells Mining Weekly.
Taylor adds that none of the large diamonds spoken about arose during the latest sampling.
New-order rights
DBCM requires new-order rights as South Africa's mining legislation, introduced in 2002, places all previously-held rights under the custodianship of the State, and miners have to meet ownership, social, environmental and employment thresholds in order to convert these rights to licences under the new regime.
Noko said of the new-order rights - still something of a rarity as a result of an apparent slow-moving bureaucracy - that the DME had been “helpful” in guiding DBCM through the process.
Noko said that “after a positive and constructive engagement process”, DBCM was able toe mbark on the development of Voorspoed.
Voorspoed comes against the background of the South African diamond industry, in the opinion of independent consultant Patrick Bartlett, not having a bright future without new discoveries.
Bartlett fears a fall from last year's South African peak of 15,15-million carats, citing increasing costs and risks facing expansions of existing diamond-mining operations.
To support his contention, he points to political uncertainty and geotechnical risks at mining depths of 700 m-plus, exemplified by the hold on the Finsch Block Five operation, the canceling of theR8-billion C-Cut project at Cullinan, the closure of the Kimberley mines, the sale of Koffiefontein and the deepening of many open pit operations.
Some 116-million carats worth$6-billion are being left in the ground at C-Cut, Bartlett points out.
Noko has given notice that the budgeted DBCM output for the financial year is below the15,15-million carats of last year at 14,7-million carats, which in itself has become a stretch target, as it was set prior to the closure of Koffiefontein on February 4 and reversion to two shifts at the struggling Cullinan diamondmine outside Pretoria.
Both the giant Venetia mine in the Limpopo province and Finsch mine in the Northern Cape are profitable and both Kimberley with the Namaqualand mines are showing improvement, but Cullinan and The Oaks - the latter coming to the end of its life and facing closure - are both running at losses.
However, globally, the story is different, with the De Beers group placing emphasis on its vision to enter a new expansionary chapter with a target of halving time from prospect discovery to mine development to six years as well as pursuing a rapidly-expanding list of capital projects.
Oppenheimer has amplified this growth ambition by arguing that he cannot recall a period in De Beers' century-plus history when it had commitment to so many capital projects, in so many places at one time.
New MD Gareth Penny, who replaced Gary Ralfe at the helm of the group, has sanctioned two major projects in Canada, one in Botswana, three in South Africa and one in Namibia. He also indicated that two other projects were close to approval: the AK6 joint venture with African Diamonds in Botswana, and the Gahcho Kue prospect in Canada.
The projects approved include the C$636-million Snap Lake project in Canada, where full production is planned for the third quarter of 2008; the C$982-million Victor project, also in Canada, where full production is scheduled for the third quarter of 2009; the $115-million South African Sea Areas marine mining project, which involves the deployment of new technology to exploit resources proved two decades ago, but only recently made economical through innovation; the R500-million mine-treatment plant upgrade at Finsch, which should yield an additional 500 000 ct/y as from 2007; the Orapa Three plant upgrade, which will replace the outmoded Orapa One plant, which should lead to superior recoveries; and a plan to upgrade the marine mining fleet capacity.