Conserving Africas Diamonds

The giant pit at Jwaneng in the African nation of Botswana is the worlds most lucrative diamond mine. On the southern fringes of the Kalahari desert to the west of Gaborone, it yields about as much by carat weight as all the mines of South Africa � once the great power of the diamond industry. And most of the stones it produces are gem-quality. The terraced cavity is already a dizzying 1,000-plus-foot deep and the digging is continuing. But mine managers say production has probably peaked, and that in eight to 10 years the operation will have to move from open-pit to more expensive underground mining. Botswana is the worlds leading source of diamonds by value, and second only to Australia by volume. But output from its four active mines, all run by Debswana Diamond Co., De Beers 50-50 joint venture with the government, is expected to level off over the next five years, after edging up to a record 31.9 million carats last year.

Blackie Marole, Debswanas managing director, talks of optimizing operations by increasing efficiency and re-treating waste dumps to extract maximum output. Last year saw setbacks at Botswanas oldest mine at Orapa, in the center of the country, which has been in production for 35 years. The Orapa deposit is one of the largest "pipes" of diamond-bearing kimberlite being exploited anywhere. People in the industry say existing finds are sufficient to last at least another generation. But De Beers and a clutch of other companies are stepping up the search for new ones. Having already spent about $100 million prospecting in Botswana over the years, De Beers has brought in heavy weaponry in the form of a zeppelin with geophysical survey equipment. The airship is said by the company to be the only one of its kind and capable of detecting likely ore deposits under deep layers of Kalahari sand. Rival companies are also intensifying efforts to gain a share of the bonanza that has made Botswana.

South African-based Petra Diamonds Ltd., which last year took over ownership of Kalahari Diamonds, is prospecting in a partnership with Australias BHP Billiton using airborne technology. "I expect well have a lot of targets to draw," said Adonis Pouroulis, Petra Diamonds chairman. BHP Billiton has "back-in" rights in the event of a commercial find. British-Australian firm Rio Tinto is exploring extensively in the western part of the country, and a number of junior mining companies are also active. Diamonex of Australia is poised to break De Beers monopoly in diamond production by seeking a mining license at Martins Drift, in a zone of eastern Botswana that De Beers abandoned.

The Botswanan government is also taking over Debswanas 15% stake in De Beers, leaving it holding the balance between Anglo Americans 45% and the Oppenheimer familys 40%. The detailed terms of the deal remain secret. But Baledzi Gaolathe, finance and development planning minister, said it was expected to lead "over time" to an increase in government revenue. He added that it also involved a commitment to continue prospecting. "We dont believe that the mines that we have discovered are the only ones," he said. "We believe that there must be some viable pipes hiding somewhere."

He added that it also involved a commitment to continue prospecting. "We dont believe that the mines that we have discovered are the only ones," he said. "We believe that there must be some viable pipes hiding somewhere."