Cut 8 investment reaches P450m
Boitshepo Majube | Tuesday February 18, 2014 13:41
According to Anglo American's full year 2013 results, project expenditure, including infrastructure expenditure, is likely to total approximately $3 billion.
De Beers is a subsidiary of Anglo American, which holds 85% equity in the diamond firm.
Once completed it is anticipated to create access to an estimated 113 million carats over the life of the mine. 'Cut-8 will provide access to an estimated 96 million tonnes of ore to be treated, containing approximately 113 million carats of mainly high quality diamonds, and extend the life of the world’s richest diamond mine by value to at least 2028,” Anglo American stated in the results released on Friday.
Meanwhile De Beers' full year production increased by 12% to 31.2 million carats compared to 27.9 million carats in 2012 with improvements across all regions, particularly in Botswana and Canada. De Beers diamond sales increased slightly to $6.4 billion in 2013 compared to $6.1 billion in 2012.
The company's rough diamond price index also increased 2 percent since the start of the year, while the average realised rough diamond prices were 5 percent higher, which the company said was driven by the product mix.
Although the De Beers rough price index increased slightly in the first half, the company said a combination of weaker polished prices, high levels of stock in the cutting centres and tightening liquidity resulted in some of this increase being reversed in the second half. 'The price decrease, together with an increase in polished sales, saw the rough market stabilise and start to improve toward the end of the year'.
It stated that in Botswana, higher production was driven by Jwaneng’s recovery from the slope failure in June 2012, which followed completion of the remediation programme in the third quarter.
The company said production at Orapa was slightly higher than 2012, despite unplanned maintenance on plant No. 1, which returned to full operation in October.
Anglo American said it expects a slight strengthening in growth in diamond jewellery demand in 2014, driven by continued gradual improvements in the global economic outlook. 'The US and China are expected to continue to be the main engines of growth for polished diamonds, while most other markets are expected to show positive growth in local currency, with final dollar denominated results being partly dependent on currency fluctuations,' it said. The company further noted that rough diamond manufacturers, in India in particular, face continued pressures regarding levels of bank financing.
'In India, further volatility of the rupee may potentially affect rough diamond sales'.
The group stated that in the medium to long term, industry fundamentals are expected to strengthen as diamond production plateaus and demand continues to increase. Concerning relocation, De Beers said it successfully completed the migration of its sales activities from London to Botswana ahead of schedule.