Wanesha Mosinyi
29 September 2008
Shareholders in Boteti, De Beers, African Diamonds and Wati Ventures, are currently in the concluding stages of discussions with the government of Botswana to resolve all outstanding issues surrounding the development of the AK6 project, a statement from De Beers says.
The diamond giant said Friday that discussions have principally focused on mitigating the impact of the regional power shortage, which presents a challenge, particularly with regard to the development timelines, for the AK6 project.
De Beers's statement comes a week after Government rejected the company's application for a retention licence. The government has given the joint venture partners until tomorrow (September 30) to agree on terms of the mining licence.
"The talks have been constructive and have aimed to find a way to provide the project with a secure and cost effective power supply, while avoiding undue delay," the statement reads. "De Beers is confident that the successful conclusion of these discussions will result in AK6 joining Botswana's world-class stable of diamond mines in 2011."
De Beers said it has agreed in principle with Government for the diamonds from AK6 to be sold through DTC Botswana, a 50/50 joint venture partnership between Government and De Beers, in order to support Government's beneficiation objectives.
Says Gareth Penny, De Beers Group Managing Director: "Government has acknowledged the gravity of the power supply issue and is investigating solutions to address the challenge and ensure the project has a sustainable supply of power."
"We are appreciative of the positive and meaningful engagement that Government has shown throughout this process. As Botswana's largest private investor, De Beers is excited to further our commitment to Botswana's diamond future with the development of the multi-billion pula AK6 project."
The Director of Mines rejected De Beers' retention licence because it was not formally lodged and a mining licence application was still pending.
Last week, African Diamonds Chairman John Teeling said significant progress had been made toward agreement on terms of a mining licence and that "difficulties with the marketing of the diamonds have been ironed out.
"African Diamonds is satisfied with the new agreement," Teeling said. "Final details are now being worked out to enable agreement on the terms of a mining licence to be completed by 30 September."
In the light of the progress being made toward a mining licence, the directors of African Diamonds said they had agreed to seek deferment of a court case before the High Court in Lobatse.
If De Beers had been granted the retention licence it sought, it would have maintained ownership of AK6 for another three to five years without developing the mine. De Beers used its majority stake in Boteti, the joint venture company developing AK6, to pass a resolution to apply for a retention licence."
African Diamonds brought an urgent interdict in the Botswana High Court to prevent the application but lost.
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