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P46 billion revenue expected from Karowe mine expansion
P46 billion revenue expected from Karowe mine expansion
OPTIMISTIC: Leonard Marumo

Business

P46 billion revenue expected from Karowe mine expansion

Karowe Diamond Mine is expected to generate close to P46 billion in revenue upon completion of the mine’s underground transformation which is projected for 2026.

The mine has been using the open pit mining method to extract ore and precious stones since 2012 when operations started.

Now with the lifespan of the open pit expected to come to an end in 2025, a switch is expected for underground shaft mining with mine ramp up expected to be in full production from quarter 2 of 2026.

With the underground project having been commissioned in 2019, construction commenced in 2020 with the project estimated to cost Lucara a staggering P6 billion in capital cost.

The project is expected to extend the mine life to at least 2040, and is forecast to contribute approximately P46 billion in additional revenues, using conservative diamond prices.

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The underground project comes with pre-sink activities for both the production and ventilation shafts, clearing for and construction of 40 out of 88 tower foundations for the 29 km 132kV transmission line bulk power upgrade, commissioning of the temporary generator farm, which will be used to power the shaft hoists during sinking until line power is commissioned, and completed.

Thus far, the project has already gobbled P998 million during the year ended December 31, 2021.

According to Operations Manager of Karowe Underground Project, Leonard Marumo, the expansion is going to extend the lifespan of the mine by a further 13 years.

“This has necessitated the need to run an underground project such that when the curtain falls down on the open pit we are ready to extract ore from underground.With our open pit mine expected to reach its economic limit by 2025, this shows the time sensitive of the project. So this transition to underground mining will give us 7200 tons of ore per day. We are looking at production capacity of 32.7 million tons of ore to be extracted and 5.1 million carats from underground over the period,” said Marumo.

Karowe Mine is synonymous with big precious stones having extracted the likes of Sewelo, Sethunya and Lesedi la Rona in the past years.

Therefore even greater potential is expected from the mine since diamond price recovery began in the fourth quarter of 2020, owing to strengthening diamond jewellery demand against a backdrop of declining global diamond supply.

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With surface work having commenced in 2020, the project will result in permanent infrastructure and equipment erected at Karowe.

As it stands, the project has employed a workforce of 732 with 84% of those being Batswana and 16% being expatriates.

“This is a major vertical shaft project in as many years, so we are the front runners and pioneers in these areas. So our hiring is focused on citizens because we believe this new techniques will help with skills transfer and development,” said Marumo.

Lucara is a leading independent producer of large exceptional quality Type IIa diamonds from its 100% owned Karowe Diamond Mine in Botswana.

Located in Boteti Region, Karowe Mine has been in production since 2012.

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