Listed Mining Companies
ADD A COMMENT PRINT By: Matthew Hill
12th August 2008
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London- and Botswana-listed African Diamonds (AFD), which was battling De Beers over a project in Botswana, on Tuesday said that the country’s government had extended the negotiation period for the AK6 mining licence to September 30.
AFD MD James Campbell was confident that the negotiations would be successfully concluded “short of an act of God”.
Theoretically, he said that the only way that De Beers would be able to block the development of the mine would be if it was successful in its application for a retention licence, which could delay the AK6 project by three years.
To do this, it would have to prove that the project was not economically viable, he said. A hearing was scheduled for September 22.This was the issue that led to the dispute in the first place.
The dispute spilled into the public arena on July 24, when AFD announced that it was taking the world’s biggest diamond producer to arbitration, after De Beers proposed that the project was not viable, owing to doubts over power supplies and capital cost escalations.
AFD argued that not only was the project viable, but that it would be able to develop the project more cheaply than De Beers would.
De Beers holds 71% of the joint-venture company that owns the AK6 project – Boteti – with AFD holding 28%.
The smaller company had even offered to buy the diamond giant out of the project.
Campbell said that he “could not see” negotiations between Boteti and the government over the terms and conditions of the licence not being concluded.
And, once the licence had been granted, Boteti would have to adhere to the plan that it submitted in its licence application, he added.
Edited by: Mariaan Webb
