Gems from Elizabeth Bay expected mid-2021

The new owners of Elizabeth Bay is finalising a finance drive to ramp up to full production.

20 October 2020 | Business

We are extremely excited about the offshore potential in our license areas which will be the mainstay for our long-term plans. – Abraham Grobler, Manager: Lewcor

Namibia's Elizabeth Bay diamond mine will start operations in the first quarter of 2021, according to its new owner, Lewcor Group.

Lewcor manager Abraham Grobler said the company is in the process of finalising a finance drive which will see them ramp up to full commercial production by mid-2021.

"The mine was acquired with a resource estimate of plus-minus 5.6 million carats. Our preliminary mine-plan includes a reserve of 2.1 million carats and stretches over a 10 year life of mine. It therefore shows major upside to capitalise on other lower grade deposits," Grobler said.

The mine, located near Lüderitz and previously owned by Namdeb Holdings, produced around 200 000 carats in 2017.

It was placed on care and maintenance in 2009 and only resumed operations in 2011 through the implementation of an optimisation project which at the time projected a four year life of mine to 2014. Through continuous innovation, the life of the mine was extended to 2019.

However, the mine's operations ceased in September 2018.

The Chamber of Mines of Namibia in its 2019 annual review said the ageing profile and diminishing resources of Namdeb’s diamond land-based operations have contributed to an unsustainable cost profile of running these mines.

“Lewcor as the new owner of the Elizabeth Bay mine, with a different cost structure, is able to inject new life into this land-based diamond operation that would have otherwise been shut down,” the Chamber said.

Namdeb Holdings concluded the sale of Elizabeth Bay to Sperrgebiet Diamond Mining (SDM) – a subsidiary of the Lewcor Group, a 100% Namibian-owned consortium – on 2 October this year. It followed a rigorous and independently advised selection process and SDM was announced as the successful bidder in September 2019.

OFFSHORE POTENTIAL

"We are extremely excited about the offshore potential in our license areas which will be the mainstay for our long-term plans. Even though we have an average small size distribution of diamonds, we are blessed with 98% gem quality stones and extremely excited about the new price discovery of our goods," Grobler said.

In its Economic Outlook in the beginning of the year, Cirrus Securities said: “The sale of the Elizabeth Bay mine to Lewcor sees a new operator in the space for the first time in many years, an exciting development.”

In its recently released Mid-year Economic Outlook, Cirrus forecast growth of 3.7% in diamond mining in 2021. The Bank of Namibia (BoN) in its Economic Outlook published in August, penned in expected growth of 5.4% next year.

Both Cirrus and the BoN expects sharp contractions in diamond mining this year: Cirrus forecasts -19%, while the BoN expects -24.6%.

“Major growth in diamond output is only expected from 2022, with the completion and introduction of Debmarine Namibia’s N$7-billion vessel,” Cirrus said.

The analysts expect growth of 32.1% in 2022, while the BoN forecasts 14.1%.

Diamond mining contracted by 17.7% in 2019, following positive growth of 15.1% in 2018. The sub-sector’s contribution to Namibia’s gross domestic product (GDP) shrunk from 4.4% in 2018 to 3.9% last year. - Own report and Nampa/Xinhua

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