Strike-hit Namdeb looks to the future

 

Windhoek – Namdeb Diamond Corp, a producer of gems in Namibia, wants to prolong the life of its land-based alluvial diamond mining operations along the southern coast to beyond 2035 from 2028. Namdeb, equally owned by Anglo American unit De Beers and the Namibian government, says it might be able to mine up to 2035, after government added another 15 years to its mining licence, which was to expire in 2020, Riaan Burger, the company’s general manager, said in an interview this past week.

Namdeb would need to “contain production costs” and “get the right technology”, to sustain its alluvial mining operations at Elizabeth Bay mine, Southern Coastal mines and Daberas, Burger said.

“The life of mines was initially expected to end around 2028. We can easily go up to end of licence period (2035) if we get the cost structures right. With optimisation of new technology, we are confident we can do more,” Burger said.

The land based operations produced around 600 000 carats in 2013, and output is shored up by marine mining unit, De Beers Marine Namibia, which last year extracted around 1.16 million carats from the depth of the Atlantic Ocean.

Namdeb says it is currently losing 1 600 carats per day, and estimate monetary loss at R10 million per day, from a strike by more than 1 500 workers, which started Saturday morning. Workers, who rejected management’s 10 percent offer, want 15 percent rise in basic wages across the board, 85 percent education subsidy at a company built school and 80 to 100 percent company contribution on medical aid, from 60 percent.

“We believe the wages we are paying the workers are fair. The union’s demands will increase costs level and this will have a detrimental effect on long-term sustainability of our operations,” chief executive Inge Zaamwani-Kamwi said told journalists in the Namibian capita, Windhoek.

“Namdeb is an ageing mine. The strategic focus has for the last five years been to break new frontiers in efforts to find innovative ways to prolong the life of operations.

“As far as we know, Namdeb may well be the oldest operating alluvial diamond mine in the world,” Zaamwani-Kamwi said.

“Events like the current strike, obviously deals a severe blow to these gallant efforts,” she added. The strike could result in “premature closure of some our operations”, Zaamwani-Kamwi said, but could not disclose possibility of the strike ending soon.

Meeting all the union’s demands could result in a “20 percent increase in the company’s wage bill and 8 to 9 percent rise in unit costs”, Burger said. Rising overheads might pressure Namdeb to shut down “marginal operations” such Elizabeth Bay mine.

“Marginal ones are the risk of closing early and Elizabeth Bay is more marginal than other operations. It’s one of those mines which if you get costs wrong, you close early,” Burger said.

Elizabeth Bay resumed operations in 2012 and is estimated to have an ore body which can sustain operations up to 2019. “Those are the current projections assuming we get unit costs right. But there is a further opportunity to extend mine life beyond 2019,” Burger said.

August 2014
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