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Debswana to sink $6bn into Jwaneng underground mine

Jwaneng open pit mine. (Image courtesy of Debswana.)

Debswana Diamond, equally owned by De Beers and the Botswana government, has earmarked $6 billion (65 billion pula) to build the world’s largest underground diamond mine at Jwaneng, already the richest mine in term of diamonds value.

The new section of the mine will have more than 360 km (224 miles) of tunnel development and is expected to achieve full production by 2034, Debswana’s head of transformation and innovation, Thabo Balopi, said on Friday.

Jwaneng underground mine is forecast to produce as much as 9 million carats per year, extending the current operation’s lifespan by 20 years.

Expansion will make of Jwaneng the world’s largest underground diamond mine

Debswana’s board is yet to make a final decision on how to finance the project, one of several executed since Jwaneng opened in 1982. The last expansion cost 24 billion pula (just over $2.2bn) and transformed the operation into one of the world’s largest open-pit diamond mines.

Jwaneng is critical to De Beers as it contributes nearly half the carats the company produces a year. In 2020, Jwaneng yielded 7.5 million carats of the group’s 2020 output of 25.1 million carats.

The mine produced 3.2 million carats in the first three months of 2021, De Beers said on Thursday, which is equivalent to 41% of the miner’s total production for the quarter.

Botswana, which is used to having an influx of international diamond buyers from Mumbai and Antwerp and traders from China, recently decided to close its Damtshaa diamond mine for three years.

The government said at that time that weak demand and trading disruptions caused by the ongoing global pandemic triggered the decision.

Debswana provides the country with around two-thirds of its foreign exchange and contributes a fifth of its GDP.

(With files from Bloomberg)