Diamond company Debswana is set to tap into a 39 million ton tailings dump at the Jwaneng Mine, which is expected to yield 800,000 carats in diamonds every year for 20 years, thus unlocking the full value of the mine's diamond wealth, Mmegi reported.
Debswana executives say a tailing treatment plant will position the producer well for the favorable supply/demand dynamics in the diamond market in the medium to long term, the report said.
The Debswana board is expected to soon consider for approval and implementation, the establishment of a tailing treatment plant, which officials say could process two million ton of the tailing dump annually, it said.
The 39 million ton tailings dump represents the residue of ore processed at the diamond mine over the decades. Prior to 1990, the Jwaneng mine did not have a re-crushing plant, meaning residue from the diamond recovery process would ultimately contain a significant amount of diamonds.
Recently, Debswana group manager for mining, Len Dimbungu, said preparations for the tailings treatment plant were at an advanced stage. "We are at feasibility stage and we will soon be going to the board for approval, before beginning implementation," he told Business Week.
"By the end of 2013, we would want to have this in place and be recovering diamonds from the tailings dump. That would secure Jwaneng up to 2033."
The tailings dump was originally slated to be established in 2008, before the global recession interfered in 2009. Plans to resuscitate the project in 2010 were subsequently set aside, with Debswana opting to focus on its existing operations.
At that time, Debswana had identified a contractor to finance, build and operate the tailings treatment plant.
Dimbungu said the project's re-ignition was influenced by the positive market fundamentals indicating diamond supply shortfalls in the medium to long term, said the report.
"The gap is going to keep developing between supply and demand and at some stage, demand will outstrip supply. Therefore, we need to make sure that we can produce as much as we can, hence the decision to establish the tailings treatment plant. We are starting afresh and we will be looking at who we can partner with. The old arrangements are no longer valid," Dimbungu said, according to Mmegi.
Diamond industry analysts agree that despite short-term weaknesses in demand related to economic conditions in one consumer or the other, the industry continues to have a supply shortfall, with few large-scale discoveries or mining operations establishing recently, the report said.