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De Beers could spend US$1.4 billion to go underground at Venetia

Diamond mining giant De Beers may spend up to US$1.4 billion to extend the life of South Africa’s biggest diamond mine, Bloomberg Businessweek is reporting.

The article says the company has approved a feasibility study looking at building underground operations at Venetia open-pit mine, located in Limpopo province; a decision on whether to invest will be made in 2012.

Barend Petersen, executive chairman of De Beers’ South African unit, said the project would extend the life of Venetia, which represents about 40 percent of the country’s diamond output, until 2046, Bloomberg reported.

The decision to go underground is based on projections that the demand for diamonds will outstrip supply and keep diamond prices buoyant as the economic recovery continues, says the news report.