JOHANNESBURG (miningweekly.com) – Aim-listed Firestone Diamonds has, to date, spent R400-million on the development of its one-million-carat-a-year Liqhobong mine, in Lesotho, with the project remaining on track and within budget.

Construction on the project, which would include a 500 t/h main treatment plant, started in June and was expected to take 24 months to complete. Production was scheduled to start at the end of the second quarter of 2016.

Firestone reported on Tuesday that orders valued at R1.28-billion out of the R1.43-billion budget for the engineering, procurement and construction management (EPCM) contract, had been placed.

The three largest contracts under the overall EPCM contract, totalling R943-million, had been agreed on a fixed-price basis to remove the escalation risk.

Further, the project team's budget of R280-million, which included, besides others, the escalation, contingency and project team salary costs was in line with the budget. 

In addition, Firestone said the pilot plant had now been removed and the earthworks were progressing on schedule.

The project had already created more than 400 jobs.

The provision of electrical infrastructure to connect the mine to grid power was also progressing as planned, with all equipment and long-lead item orders having been placed and site preparation for the substations well advanced. The power project was expected to cost R165-million and the mine was expected to be connected to the grid by the second half of 2015.

Investec commented that Liqhobong looked set to be one of the few new diamond mines to be delivered in the foreseeable future and that was likely to come on stream as the outlook for diamonds became “increasingly robust” amid rising demand and supply struggling to “keep pace”.

Meanwhile, Firestone said the final conditions precedent for the drawdown of the $82.4-million Absa facility were progressing on schedule and were expected to be completed well before the need to draw down on the facility, which was likely to be late March.