Botswana Diamonds (LON:BOD) said last Thursday that it had received a “critical” environmental authorisation for diamond-bearing gravels from the Marsfontein mine, next to the company’s own Thorny River project in South Africa. The company noted the permission, granted to its associated firm Vutomi, was a critical step towards obtaining a mining permit. The permit is considered crucial in the process towards obtaining a mining permit, which Botswana Diamonds expects to receive shortly.
“We believe the mine gravels and unprocessed stockpiles around the Marsfontein mine contain commercial grades of diamonds,” chairman John Teeling said.
Botswana Diamonds has identified potential partners to process the gravels and stockpiles.
The company, which has long believed there should be high-grade kimberlite pipes other than the Marsfontein mine in the Thorny River area, said it expected mobilisation to begin within six weeks.
Diamond miners are struggling across the board, especially those producing cheaper and smaller stones where there is an over-supply. Buyers, those that polish and cut diamonds for retailers have been hit this year by lower prices and tighter credit, prompting them to delay purchases. Tiffany’s reported in August a 3% decline in like-for-like sales, while shares in Signet, the world’s largest retailer of diamond jewellery, have lost more than 60% of their value this year.
De Beers, the world’s top diamond producer by value, has responded by axing production – with a target of 31 million carats this year compared with 35.3 million in 2018. It has also announced it would spend more on marketing.
At the latest sale, the company increased the amount of stones buyers were allowed to reject in each lot purchased from 10% to 20%, according to people familiar with the auction.