De Beers Mulls Sale of Botswana Mine

RAPAPORT… Debswana, De Beers’ joint venture with Botswana, is pondering the sale of the Damtshaa mine, after it paused production in November amid challenging market conditions.

The group placed the mine — one of its lowest-producing assets — on care and maintenance because its operational costs outweighed its marginal cash flow during the coronavirus pandemic. The disposal of the mine is only one of the various options Debswana is considering.

“Debswana continues to look at ways to transform and optimize its operations, with the aim to increase shareholder value,” a De Beers spokesperson told Rapaport News last week. “As part of this, Debswana is looking at the future strategy regarding Damtshaa, and is evaluating different options, but no decision has yet been made in terms of what the strategy will be.”

Damtshaa first opened in 2003 as a 50:50 partnership between De Beers and the government. The miner stopped production at the site in 2015, during a slowdown in the rough market, resuming output in 2017. However, the deposit remains a relatively insignificant source of diamonds, contributing about 1% of Debswana’s total production, and is currently at the waste-mining phase.

Despite that, Debswana would like to hold on to the mine if it proves economically viable.

“[While] a possible sale is one of the options being reviewed…it’s not currently the preferred option,” the spokesperson added. “The final decision will, however, be informed by the outcome of the ongoing review process.” 

Image: Rough diamonds. (De Beers)