RAPAPORT… BHP Billiton reported that production at its Ekati mine in Canada fell 18 percent year on year to 740,000 carats in the fourth quarter that ended on June 30, 2010. Output from the mine dropped due to the lower average grade achieved at the mine, the company explained in its group production report. Production for the full fiscal year fell 5 percent year over year to 3.05 million carats.
The company stressed that it remains cautious about short-term prospects for the global economy as governments in the developed world adjust their fiscal policies following a period of significant stimulus and ensuing increases in sovereign debt levels.
Lucara, Botswana Form Marketing Arrangement
Lucara Diamond and its partner African Diamonds completed a marketing arrangement with Botswana through their joint-venture company, Boteti, according to which production from the AK6 project may be sold through either open tender or exclusive contract. Lucara, the AK6 project operator, holds a 60 percent interest in Boteti, while African Diamonds holds 40 percent.
An updated feasibility study of AK6 noted indicated resources of 51 million metric tons of ore containing 8.2 million carats of diamonds. The mine design delineated a probable reserve of 36.2 million metric tons of ore containing 6.3 million carats of diamonds in an open pit extending to a depth of 324 meters over an 11-year mine life span. Work commenced in July 2010 and diamond production is expected to ramp up to full capacity during 2012.
The junior mining companies also announced the appointment of Ribson Gabonowe to head Boteti. Gabonowe served as Botswana’s deputy permanent secretary in the ministry of local government before joining African Diamonds over two years ago.
U.S. Updates Child Labor List, Conflict Minerals Provision
The U.S. Department of Labor issued an updated list of products that federal contractors must certify were not mined or made with forced or indentured child labor before they can be procured by the U.S. government. Diamonds from Sierra Leone and gold from Burkina Faso were included on the list of 29 products.
The trade was also reminded by the Jewelers Vigilance Committee (JVC) that only publicly traded manufacturers and mineral mining companies are impacted by the conflict minerals provision of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The new law requires these firms to file annual gold-sourcing reports with the Securities and Exchange Commission (SEC) disclosing whether gold mined and/or used by the companies originated in any of the countries designated as conflict areas, including the Democratic Republic of the Congo (DRC) and nine surrounding nations. If so, the reporting company must provide information on the due diligence it exercised to ensure the gold did not benefit armed groups.
Mervis Diamond Wins Legal Battle
Mervis Diamond Importers in Rockville, Maryland announced that it prevailed in its five-year court battle with a local developer over its claim for specific performance and lost-profit damages. In 2005, Mervis sued Congressional Hotel Corporation (CHC), claiming it had failed to deliver 3,000-plus square feet of retail space under the terms of their lease. The jeweler sought specific performance and compensatory damages in the form of lost profits for the period of time that it was out of business.
The Circuit Court of Montgomery County ruled in favor of Mervis, but CHC appealed the case on two occasions, Mervis’ statement explained. However, the Court of Special Appeals of Annapolis, Maryland ultimately upheld the verdict and awarded Mervis over $500,000 more in damages than at the first trial. In addition to $2.9 million in lost-profit damages, CHC is liable to Mervis for pre- and post-judgment interest and legal fees. The total value of the award runs close to $5 million, according to Mervis.
