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De Beers approves multi million dollar debmarine namibia investment

Publishing Date : 20 May, 2019

Author : ALFRED MASOKOLA

De Beers Group a 15 % Botswana Government owned leading diamond miner on Thursday 16th May announced the approval of a multimillion dollar new investment by its Namibia sea coast diamond mining operation.


According to the De Beers Parent company Anglo American, secondary listed on Botswana Stock Exchange, the investment forms a total capital cost of $468 million equivalent to almost P5 billion for the construction of a new custom built diamond recovery vessel at De Beers ‘s marine diamond recovery outfit Debmarine Namibia. The latter is a 50:50 joint venture between De Beers Group and Government of the Republic of Namibia.


The new vessel will become the seventh in the Debmarine Namibia fleet and the world ‘s first ever built custom-built diamond recovery vessel and is expected to begin production in 2022 with capacity to add 500,000 carats of annual production, boosting Debmarine Namibia figures up by 35% from its current levels. The highly ancitciapated move, approved by Debmarine Namibia Board of Directors will represents the largest ever single investment in the marine diamond industry with $234 million (over P2.4 billion) attributable to Anglo American through De Beers.


In a statement released on Thursday, Mark Cutifani, Chief Executive Officer of Anglo American, De Beers parent company says the addition of this custom-built vessel for the Debmarine Namibia joint venture will bring numerous benefits in terms of De Beers’ production profile by value and volume, the technologies that can be deployed from the outset to deliver greater efficiency and productivity, and sustained economic benefits for Namibia.


“This highly attractive investment offers a three-year payback, a more than 25% IRR and an EBITDA margin of more than 60%   typical of the high quality of our brownfield growth options. We will continue allocating appropriate levels of capital in a disciplined manner across Anglo American’s wider organic pipeline of near and medium term growth opportunities, including the world class Quellaveco copper development in Peru, that we expect to contribute towards our 20-25% production growth by 2023.” He said


In a separate statement released by De Beers on the same day, the Group revealed that following an extensive global tendering process, leading marine mining experts Damen Shipyards were selected to build the ship base on their strong track record for delivering quality vessels and their advanced technological capabilities. De Beers says the new vessel will incorporate the latest marine technologies that will drive improved safety performance while optimizing efficiency and utilization rates.


Chief Executive Officer of De Beers Group Bruce Cleaver shared that some of the highest quality diamonds in the world are found at sea off the Namibian coast. “With this investment we will be able to optimise new technology to find and recover diamonds more efficiently and meet growing consumer demand across the globe.” He said


Captured in the De Beers statement Tom Alweendo, Namibia Government Minister of Mines and Energy commented that the investment further positions Debmarine Namibia as a key player in the sea coast diamond mining industry. “It is through investments like this we can continue to develop Namibia’s economy. As the Government we will continue to do what we can to promote and encourage investment in the mining sector.” He said. The new vessel is expected to create more than 160 new jobs alongside Debmarine Namibia’s current workforce of 975 employees.


Debmarine Namibia conducts marine-based diamond recovery around 120 to 140m below sea level in the Atlantic Ocean of the Namibian coast. Operating a fleet of six motor vessels (mv), capable of retrieving, and exploring for diamond-bearing materials from the seabed and processing them to a diamond-rich concentrate. They are mv Debmar Atlantic, mv Debmar Pacific, mv! Gariep, mv Grand Banks and mv Mafuta.


The sixth fleet preceding this newly announced one is currently the world’s most highly advanced diamond exploration and sampling vessel, bearing the nomenclature mv SS Nujoma, named after Namibia's founding president Dr Sam Shafiishuna Nujoma ,Mv SS Nujoma has been built at a cost of N$2.3 billion (US$157 million) and started full operations in June 2017.


The 12,000 tonne diesel-electric vessel, which has led to the creation of 140 jobs, the vast majority filled by Namibians, is 113m long and can accommodate a crew of 80. In addition, two chartered vessels, mv Coral Sea and mv Explorer, are used by Debmarine Namibia for exploration and sampling with rehabilitation of the seabed and the marine environment occurring naturally over time.


Namibia has the richest known marine diamond deposits in the world, estimated at more than 80 million carats. They represent around 65 per cent of Namdeb Holdings' total diamond production and 90 per cent of its diamond resources. Marine diamond recovery now produces more in annual volumes than the country’s land-based diamond mining. Investment into new custom-built diamond recovery vessel is expected to further position Namibia marine diamond industry as one the most prolific and leading in the world.

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