- The Equitable Access Campaign's response to James Allan's June 17 article (0.28 MB)
In response to a letter from the Equitable Access Campaign (EAC), published by Mining Weekly on June 26 – which highlighted the plight of small-scale marine diamond miners operating off the coast of Alexander Bay – Sable Metals & Minerals CEO James Allan reiterates that a panel should be appointed to fix State-owned diamond mining company Alexkor.
He emphasises that by appointing a panel of reputable and knowledgeable experts to investigate the severely depleted land resources, and professionally evaluate the possible upside potential of the mid- and deep-water marine deposits, it might be possible to sensibly extend the life of Alexkor and continue to contribute to employment and other long-term development in northern Namaqualand.
However, he also notes that several factors may hasten the demise of Alexkor and cause further economic hardship in the region.
These factors include a lack of political leadership and direction, an inadequate technical understanding of the challenges and the highly depressed state of the international diamond industry as a result of the Covid-19 pandemic.
“Exacerbating this situation is the neglect of the range of other development and job creation options that also exist in northern Namaqualand.”
Meanwhile, in June, the EAC had also set out to counter Allan’s claim that the current split established with the pooling and sharing joint venture between Alexkor and the Richtersveld Mining Company (Alexkor RMC JV) favours mining contractors over small scale miners.
To this, Allan responds that the current split has been found to be appropriate over a long period of time. “If it does favour the contractors, this is appropriate given they carry all risk, including mining, geology, an old and depleted resource and decreasing sea-days as a result of climate change.”
He adds that there is ample evidence that the mining contractors themselves do not have highly profitable operations.
Allan reiterates that Alexkor’s land and shallow marine operations are increasingly marginal and changing the revenue split could result in some of the contractors leaving for other, better, options.
He also says that although the EAC may believe there is no such thing as an experienced diamond valuator taking care of the contractor’s interests, the point is that the contractors appointed their own valuator to look after their interests.
“Perhaps the EAC were not satisfied with the appointment that was agreed to by the majority of contractors?”
In their original response to Allan’s previous commentary, the EAC also noted that the marine diamond deposits south of the Orange river outlet into the sea – the area territorial to South African marine diamond miners – are largely intact as a result of low levels of mining, and therefore hold significant potential to still be mined. “These [deep water terraces] still have the potential to be mined for another 100 years,” the EAC said.
To this, Allan rebuts that it is “well known that the marine and land based diamond deposits of the Atlantic coastline were richer on the Namibian coastline north of the Orange river.”
He says this is a result of the prevailing northerly longshore-drift of the ocean currents and winds that pushed most of the diamonds carried to the sea by the Orange river, and other large rivers to the south, northwards into Namibian waters during the deposition of these deposits millions of years ago.
For these reasons, Allan says most of the modern marine diamond mining off the west coast of Southern Africa has been undertaken in Namibian waters because of the more extensive and high-grade marine diamond deposits.
“In addition to this, the seabed off the Namibian coast is generally flatter and more suited to mining by an underwater crawler or suction head, while the South African seabed tends to be more uneven and has more gulleys, making the mining of these areas more difficult.”
According to Allan, the exploitation of Alexkor’s mid-water and deep-water concession area will require substantial capital investment in exploration before delineated and mineable resources can be established and profitably mined.
“There are marine diamond deposits on the drowned deposits off the Namaqualand coast but expensive geophysical surveys, delineation and evaluation of these deposits are required.”
He adds that some previous work has been done in Namaqualand off-shore waters by the likes of Benguela Concessions, Trans Hex and Moonstone Diamonds. To this extent, Allan says $10-million was spent on the Moonstar mining vessel in the late 1990s to prospect and mine the 2B and 3B Concessions off the Namaqualand coastline but, at that time, the results were disappointing.