Is there a chance of another Venetia, South Africa’s richest diamond mine, which was stumbled upon in the seventies?
“You obviously don’t know the answer to that,” is Oppenheimer’s reply.
“But De Beers is spending money on exploration in South Africa and we obviously wouldn’t be doing that if we didn’t think there was potential,” he adds.
“As everybody knows, the discovery of diamond mines is a very time-consuming and difficult task, and if you ask how many diamond mines are there in the world, and by that I don’t mean somebody scratching something on the surface and employing a few people but major diamond mines, you find that diamond mines are very few and far between.
“Certainly, here in South Africa, the last major discovery was Venetia in the seventies, but we believe there is still potential in South Africa,” he reiterates.
“The De Beers prospecting team look very carefully at where they can spend their money and the fact that they are still spending money in South Africa says they believe this is still a country where you could possibly find new diamond mines,” Oppenheimer expands.
As it seems to come in eights for Nicholas Frank Oppenheimer – he was born on June 8, joined the Anglo American group in 1968, was appointed De Beers chairperson in 1998 and is custodian of a company founded in 1888 – it would not be numerically inconsistent – but certainly overly wishful – to presume that such a new discovery could come about in 2008.
In all of his public presentations – and last week’s opening of Finsch’s R630-million diamond plant upgrade in the Northern Cape was no exception – the 63-year-old Oppenheimer makes no bones about his being proudly South African and illustrates that by continually putting De Beers’ money where its proudly South African mouth is, in the last four years investing R3-billion in the South African diamond industry, and constantly looking for new opportunities.
He keeps De Beers way out in front technologically. While the rest of the world is conceptualising offshore marine mining, De Beers has been out there for years, reaching a technological acme with the launch of the Peace in Africa, which is mining diamonds off the coast of the Northern Cape, the province which was the company maker 120 years ago for what is today still the world’s largest diamond mining and marketing company.
Finsch mine, for instance, has an automated driverless truck-haulage system in its underground workings as well as big underground jumbo drill rigs that are remotely controlled.
Moreover, the new Finsch treatment plant has cut water consumption by 30% in the arid Northern Cape through better thickener control and has implemented advanced new techniques that liberate diamonds “far more gently” from their host rock, using state-of-the-art high-pressure roll crushers that provide “the least diamond breakage”. De Beers’ own DebTech provided the new-generation X-ray system from its Johannesburg base and “we continually research new technology in X-rays”, says De Beers head of operations Mike Brown.
“The x-ray sorting machines that we put out these days are much more efficient than the machines of 15 years ago,” Brown adds and these machines are also going into De Beers’ new Snap Lake operation, in Canada, and Voorspoed, in the Free State, which will be officially opened towards the end of this year.
There is also the use of new wet in-field screening at Finsch in which dump material is put into a ‘liquidiser’ for pumping to the plant, as well as a brand-new set of coarse dense-medium separators (DMSes), which enable Finsch to split coarse material from fine material, with coarse material reporting to one DMS and fine material to another in order to provide “much better” separation.
Which is why it is such a pity that Finsch’s economic viability is on a knife edge as a result of the South African government’s move to impose royalties on diamond- mining revenue.
De Beers’ South African operations fall under the company’s South African arm, De Beers Consolidated Mines (DBCM), headed by DBCM CEO David Noko, who comments: “We are currently in discussions with respect to the royalty situation and the process has not been completed. Generally, as a matter of fact, you will understand that any tax on revenue impacts on profitability, but we cannot comment directly on what the impact is going to be on the Finsch mine.”
It is Noko who has presided over the streamlining of the DBCM business, the creation of a new value-driven business model and the disposal of unprofitable operations, mainly to Petra Diamonds.
In doing so, DBCM has strategised to accept an output drop to 12,7-million carats in 2008, from a level of 15-million in 2007.
Will there be further DBCM disposals? Discussions are ongoing on the future of DBCM’s Namaqualand diamond operation: “The sooner we have a definitive answer on Namaqualand, the better, but we don’t have one at the moment,” Oppenheimer tells Mining Weekly.
“We wouldn’t have been getting out of the mines that we have got out of if we thought we could make money out of them.
“We believe the new owners will operate them in a different way, and not by any manner of means a worse way, and we certainly hope that they will make money,” says Oppenheimer.
There will also be a chance for De Beers to demonstrate its mine-closure prowess when operations cease this year at the “very minor” Oaks operation, where the last blast took place in May.
On plans to beneficiate diamonds further and possibly even to create and market mine-specific cut diamonds, Noko emphasises that DBCM is a diamond-mining company only: “We are not a cutting and polishing company in diamonds. We produce raw materials for others,” he stresses.
Putting Something Back
Sustainable development is currently a buzzword in the resources world; this is because of the belief that natural resources are a national patrimony and should, therefore, lead to shared national wealth.
Last year, the lion’s share of the $6,2-billion that the 120-year-old De Beers passed on to its stakeholders – $4,7-billion – came to Africa. In 2006, $5,9-billion was passed on to stakeholders.
Stakeholders in De Beers’ book include producer government partners, consumer country governments, employees, civil society, near-mine communities, inter- governmental organisations and even journalists and the media.
Oppenheimer will say, as he did at last week’s opening of a new R630-million plant at De Beers’ Finsch diamond mine in the Northern Cape – De Beers’ birthplace – that the company is following the dictum of his grandfather of “putting back something into the areas and regions where we operate”.
State Diamond Trader
Oppenheimer confirms that De Beers has sold diamonds to South Africa’s new State Diamond Trader: “We have sold them some diamonds, yes,” he reports, on the issue of the right of the State Diamond Trader to buy 10% of the run-of-mine diamonds produced for sale to emerging participants in the diamond cutting and polishing and diamond jewellery businesses.
“From our perspective, we very much hope that the State Diamond Trader becomes a very successful operation and is able to help smaller people in South Africa to get into the diamond-cutting business,” Oppenheimer says.
Avoiding Ghost Towns
Northern Cape Premier Dipuo Peters lays it on thick when it comes to avoiding future mining ghost towns, as she did in her speech at Finsch: “Every mining operation’s life will eventually come to an end, but this should not be allowed to bring the livelihoods of people to draw to a close.
“This is why, as government, we are continuously encouraging mining houses to equip mining employees with skills to serve them beyond mining operations,” she says. Peters, like many in government, wants beneficiation – diamond cutting and polishing – and communicates an ambition for an ‘Antwerp’-like diamond centre in South Africa, as Dubai is reportedly planning.
“Today, we are told about the initiatives around Dubai. If we don’t do something while there is still time, history will judge us,” Peters harangues.
What is Dubai doing to create the environment for a diamond centre? That is the question that needs to be asked if something similar is ever to stand a chance of taking shape in South Africa.