De Beers prepares seventh ship to mine Namibia’s seabed
The $468m addition to the Debmarine Namibia fleet is expected to recover 500,000 carats a year
De Beers, the world’s largest producer of rough diamonds by value, will build a seventh ship at a cost of a $468m to suck diamonds from the seabed off the Namibian coast.
The cost will be shared between De Beers and the Namibian government in their equally held Debmarine Namibia joint venture.
The ship is expected to deliver 500,000 carats of diamonds a year after it comes into production in 2022.
“Some of the highest-quality diamonds in the world are found at sea off the Namibian coast. With this investment we will be able to optimise new technology to find and recover diamonds more efficiently and meet growing consumer demand across the globe,” said De Beers CEO Bruce Cleaver.
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According to the Debmarine Namibia website, Namibia’s diamond output, 95% of which is of gem quality, achieves the world’s second-highest value per carat.
Debmarine Namibia’s annual production capacity is about 1.4-million carats a year, making up more than two-thirds of the country’s annual diamond production.
In 2018, Debmarine Namibia generated 1.436-million carats, up from the previous year’s 1.38-million carats.
The investment comes shortly after De Beers launched its Lightbox business to make and sell laboratory-grown diamonds at set prices, taking on the synthetic diamond business head on with low-cost production.
Anglo American owns 85% of De Beers and the Botswana government the remaining 15%.
Anglo CEO Mark Cutifani described the new ship as a “highly attractive investment”, with a three-year payback, an internal rate of return topping 25% and an earnings before interest, tax, depreciation and amortisation margin above 60%.
“We will continue allocating appropriate levels of capital in a disciplined manner across Anglo American’s wider organic pipeline of near- and medium-term growth opportunities,” Cutifani said.
De Beers, and by extension diamonds, is one of the key divisions in Anglo.
De Beers is spending $2bn at its Venetia mine in SA, moving mining underground from the open-pit operation and extending the life of the mine to 2045.
Anglo has also triggered the construction of the $5bn Quellaveco copper mine in Peru, another key project.
Quellaveco would “contribute towards our 20-25% production growth by 2023”, said Cutifani.