For De Beers, “megamines” are typically the size of Orapa and Jwaneng, the two local operations which together produce more than two thirds of the diamond group’s annual output which averages above 30 million carats. Known as Tier 1 discoveries, mines such as Jwaneng and Orapa are extremely rare and the diamond industry has not found such in more than 20 years.
De Beers previously explored Angola in the 1970s finding signs of “rich deposits” but a bloody civil war, attacks on operating mines and the Dos Santos family control of mining, kept the diamond giant out of the exploration fields.
De Beers has since returned to the country and last year signed two 35-year contracts with the Angolan government, covering exploration to mineral production.
“Angola is a very prospective country and it’s probably the last country in the world where you will find a very big new diamond deposit,” De Beers co-chair, Bruce Cleaver told BusinessWeek on Monday. “I’m sure we’ll find more deposits in Botswana, but they will not necessarily be of the size of Jwaneng and Orapa because I think those ones have been found. “Angola is the one country that we think in the world you could still find a mega mine.”
De Beers is the world’s most fervent diamond explorer, and in its 135-year history, the group has found about 40% of the 8,000 kimberlites or diamond-bearing soils ever discovered on Earth. De Beers’ operations currently cover deserts in Botswana, seas in Namibia and frozen tundra in Canada as well as South Africa.
While De Beers spends about $35 million annually on exploration, it is yet to discover other “Orapas and Jwanengs” over the years, heightening the excitement around Angola.
“We have been in Angola for years and years and we never quite withdrew,” said Cleaver, who is also the former De Beers’ CEO. “We could not come to economic terms with Angola a few years ago, so we stopped what we were doing, but we kept people in there. “But we have a very, very favourable deal with the Angola government, which I went and signed with President (João) Lourenço last year where we have a Mineral Investment Contract over two different areas of land, big areas of land in Angola.”
He added: “Subsequent to that signing we have worked to fulfil all the conditions precedent in that agreement and you will find that we will put boots on the ground and start spending money in Angola in 2023 and we are very excited about that.”
Cleaver’s comments come as the group and the Government of Botswana finalise a new agreement governing sales from the Debswana mines, a protracted process in which signs of division recently boiled to the surface. The two long term partners are also negotiating mining lease renewals for the Debswana mines ahead of their expiry in 2029.
President Mokgweetsi Masisi recently made comments that have been read by analysts as a desire to see more of Debswana’s production being independently sold through the state diamond trader, Okavango Diamond Company (ODC). The ODC is currently entitled to purchase 25% of Debswana’s production, which it independently values and sells, allowing government price discovery outside the De Beers’ sales ecosystem.
Asked whether going forward, De Beers was factoring in the possibility of a lower supply of stones from Debswana, Cleaver said the group’s focus was on securing a “win-win” deal by the June deadline.
“We have mines all over the world, not just in Botswana. “We are doing a big expansion in Venetia in South Africa and we have a big mine in Canada and mines in Namibia. “We do have supply elsewhere, but the only way for me to answer that question is to say I’m very confident that we will come to a deal that is sensible for all parties and that all parties will be pleased with that. “That’s what I’m focussed on and that’s what the team is focussed on.”
