Wanetsha Mosinyi
3 October 2008
The government has extended negotiations for the mining licence for the AK6 diamond mine for the second time.
The negotiations have been extended by two weeks for the mining project, which is a joint venture between African Diamonds and De Beers.
In a statement this week, African Diamonds said the details of the terms of a mining licence for the mine near Orapa, are being finalised between the government and the joint venture partners.
The BSE-listed company said it has not been possible to finalise the negotiations and the terms by the deadline of September 30 as indicated by the Botswana government director of mines. Hence they requested and got a two-week extension.
"Public holidays and the volume of work meant that all sides agreed to a two-week extension to conclude the terms of the mining licence. Last week's discussions were productive and constructive, and went well," said African Diamonds chairperson John Teeling in a statement.
In July, African Diamonds made known its intention to start legal proceedings against its partner De Beers.
The move came after De Beers sought to delay the start of the project, citing power constraints as a limiting factor.
However, in September, the government denied De Beers' application for a retention licence. The government said the application was not procedurally lodged because the mining licence application was still pending.African Diamonds thus shelved plans to challenge De Beers in court.De Beers recently indicated that the talks for the start of mining are constructive.
It added that the discussions principally focused on mitigating the impact of the regional power shortage, which presented a challenge, particularly with regard to the development timelines for the AK6 project. De Beers was confident that the successful conclusion of these discussions would result in AK6 joining Botswana's stable of diamond mines in 2011.
Separately, De Beers and government have agreed that the diamonds from AK6 would be sold through Diamond Trading Company Botswana (DTCB) - a 50-50 joint venture between the two parties. "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," said De Beers' group managing director, Gareth Penny.
African Diamonds holds a 28 percent stake in Boteti - the joint company that owns the AK6 project. De Beers holds 71 percent.
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