- An agreement has been signed for prospecting at the Orapa and Jwaneng gem projects in Botswana, which is already the world's largest diamond producer by value. The two exploration projects are owned by Firestone Diamonds and prospects are to be financed by De Beers, the world's largest diamond company.
This joint venture exploration project was announced yesterday by Firestone, a London-based mining company. De Beers had agreed to finance development and exploration of Firestone's two projects in Botswana. Consequently, Firestone shares rose to a six-year high at the London stock market.
The Orapa and Jwaneng prospecting licences cover an area of approximately 5,000 square kilometres and are considered to be highly prospective for hosting diamondiferous kimberlite as they are located close to the Orapa and Jwaneng diamond mines, according to Firestone.
Orapa and Jwaneng are already the two richest diamond mines in the world, producing approximately 29 million carats per annum with a value of over US$ 2.5 billion. Much of the area covered by the Orapa and Jwaneng prospecting licences has however never been fully explored using modern geophysical exploration techniques, and is considered to be highly prospective for the discovery of new diamondiferous kimberlites.
This exploration project has now been financed by De Beers, a South Africa-registered giant diamond company controlling a large part of the world's diamond production. In Botswana, De Beers operates by its own but also through the De Beers-Botswana Mining Company (Debswana), a private unlisted company jointly owned by De Beers and the Batswana government.
In the new Orapa and Jwaneng explorations, De Beers is set to earn a 61 percent interest in each project, according to the statement issued by Firestone. In return, De Beers is to finance and carry out all exploration and evaluation work on the Orapa and Jwaneng projects, "up to and including the completion of bankable feasibility studies on any kimberlites discovered in each project area."
- The signing of these two new joint ventures with De Beers indicates that they also believe that the potential for the discovery of new diamondiferous kimberlites in these areas is very good, commented Firestone Chief Executive Philip Kenny.
Bill McKechnie, Director of Global Exploration for De Beers, also commented: "De Beers is very pleased to have concluded these additional joint venture agreements with Firestone Diamonds for areas in Botswana that we regard as being highly prospective."
The global diamond industry has been very active in finding new potential projects lately as prices of rough diamonds suddenly rose to the sky. During the last month, however, prices have rapidly fallen to normal levels and are remaining stable.
For Botswana, the Orapa and Jwaneng exploration projects could mean even larger revenues from the diamond industry, which is already contributing heavily to the relative prosperity in the nation. Arounf one third of Botswana's annual GDP and three quarters of export earnings arise from the diamond industry.
The diamond mines and industry are also the largest employer in the country. Some 60 percent of total Batswana government tax revenue is believed to stem directly from the diamond industry. Botswana is often praised for being one of the world's few countries remaining politically stable and allocating revenues fairly despite the so-called "curse of natural resources".
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