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Orapa & Letlhakane mine: The highs and lows of the world’s largest diamond mine – Part One

ORAPA: If Las Vegas is famous for its glitterati lights and trendy casinos, the gambling and money spinning haven for a cross-section of the wealthy one percent, Miami, London and Paris the fashion and culture capitals of the modern world.

Hollywood the nurturing cradle of pop-culture that churns out the world’s glamorous, the best entertainers and super stars to wow and thrill our planet. New York, the concrete jungle where dreams are made, then Orapa is the world’s one of a kind reliable and highly trusted giver of rare, special, precious rocks, a gift to the word that keeps on giving.  


The Orapa diamond mine owned and operated by Debswana is the world's largest open cast diamond mine located in a small township in the Boteti Sub-District. Orapa has for many years decorated royals and Hollywood stars with jewelry from its priced and truly special diamonds, it is a magical oasis of precious stones in the sweltering warmth of the unforgiving Boteti heat.

At its best, Orapa is to the Botswana economy what Obama is to American politics, what Mandela is to South Africa, what the Buggatti is to the car industry. It is what Floyd Mayweather is to Boxing, but that was then. For close to fifty years, Orapa has endured its highs and lows, it has experienced its boom and bust, in that order and the tale as told by its very first inhabitants is an incredible one.   


After close to half a century of uninterrupted high value diamond production and critical support to Botswana's economic development, Orapa is not the same place it used to be. Its first employees and original residents now in the evening of their lives, men who dared to literally invade the sleeping place for lions, (The word Orapa is actually a Sesarwa word that means resting place for lions) sleeping in nothing but makeshift tents (Camp Lamando) when Orapa was just a thicket of bush, a feared forest where lions roamed and the human species, except for some highly experienced Basarwa animal trackers would not dare to step foot in, look back with nostalgia and reminisce about the good old times of the Orapa Beer-fest, the Christmas parties where drinks over-flowed non-stop, the days of Orapa owned Television Station, memories of mine sponsored shopping sprees and the mine bonus program mpho le mphonyana as well as the generosity of the then Minister of Minerals, a certain Minister Mswele, who now seems all forgotten.

They saw the township being built, brick by brick from the ground up, they witnessed too much during the life of the mine. They posses the greatest institutional memory, but yet have also forgotten a lot in the last forty five years which they now remember in bits and pieces before it is all lost to historical record.   


This week, two old men who were part of the tiny cohort of Orapa mine’s first employees sat down with this publication to jog their memories and attempt to remember all that was Orapa of yesteryears, Orapa of their time. Eighty year old Kgosiemang Diepo, born in 1935, says that he started work at Orapa mine in 1967 when the mine had just been discovered and the AK1 kimberlite just indentified. 

He describes that time as the ‘best of days’. Orapa, the oldest of four mines operated by Debswana, begun operations in July 1971, four years after he had begun work at the mine.

By then Diepo was only 35 years old, and had no idea he was going to embark on the task of building the world’s largest diamond mine, which will turn out to be the mainstay of Botswana’s economic success model for many decades.


Kgosiemang Diepo started work at the mine during it initial prospecting, first sampling and evaluation process in 1967 and was among those in attendance when it was officially launched and open for business in 1971 by His Excellency Sir Seretse Khama. 

He says he was part of the mine’s first geologists, led by Manfred Marx, and ably assisted by Dr Gavin Lamont and Norman Randel who carefully traversed the carnivores infested forest of Boteti in search of precious stones, then he had never laid eyes on the stone they sought. He says this adventures process, which later included sampling and evaluation of soils and rocks took them two years to complete. 

On June 23rd 1968, the De Beers Botswana Mining Company was born. He says he remembers that special moment then when the first diamonds were discovered and he first laid his eyes on the stones he had longed to see. 

The old man saw all that is Orapa today from conception to execution. Now retired and a headman of arbitration at Mokgobelele Ward in Letlhakane, know for his trademark safari hat, Diepo says he had no idea then he will stay at Orapa mine for more than 26 years, let alone live to tell the tale to the younger generation.


“I was among the first local inhabitants to work in the Orapa diamond mine, which was then not called Orapa or Debswana but De Beers Mining Company. I begun work on the 26th May 1967, when Orapa was still just a camp and we lived in temporary structures. The mine headquarters were in South Africa while the geology office was based in Lobatse” the old geezer says slowly.


He says many of the people he began work with at the mine are late and that his first responsibilities at Orapa were clearing bushes, creating space for internal roads, digging, prospecting and taking soils sample. He was a jack of all trades “we were basically preparing for the parrot plant building, back then we used very rudimentary equipments and everything was a process of discovery through trial and error.

I remember that we were initially paid R8 and then later R10” he says. He says heavy duty drivers who are now paid between P10, 000 and P20, 000 by the mine were only paid R15 “Our Chief geologist was a Scottish man called James George Gibson and our general manager who I remember been picked at the Francistown train station regularly lived in Johannesburg and would only visit to check on progress” he remembers vividly.


He says when the mine was handed over in 1971, it was a period of great joy and trepidation among his contemporaries, and the mine’s first employees “since that day, the mine has operated unabated and uninterrupted, its plant operates non-stop day and night” he says.

“Orapa then was like the biblical land of milk and honey, it was a hodgepodge of people from different nationalities, all focused and committed to the search of one thing, the world’s most valuable rocks. From there on we started having a mix of people from Germany, Canada, South Africa and Zimbabwe coming to this place” he says.

He says many of the new arrivals then brought their children and settled in Orapa. He says that even gold diggers from the south African gold mines, mining engineers, metallurgists, steel experts and the like started descending into Orapa in their droves “as the population of people increased, the mine decided to build the township as you see it today, a modern town, with modern brick houses, additional housing was added gradually over the years to convert the bush into a true modern mining city” he says.  

He says back then the mine took good care of its employees “ R10 was a lot of money in the 70’s, the mine could also afford to give its employees, housing allowance, free gas, free electricity, cars to go shopping in Francistown, all expenses paid as there were no shops in Letllhakane or Orapa” he says.


Gabaratane Maphane Mawala, born in 1934, says he was operator with the mine for 20 years. He says they used to be given mine cars to go wherever they wanted “back then to work in the mine gave you prestige in the village, the mine operated non-stop day and night, it never closed, we had 3 shifts, one from 8-4pm, followed by another from 4pm- 12 mid-night, then another group would go to work from 12 midnight until 8pm, the cycle would continue and that cycle has been like that to date. In our time we would be given seven days off work to rest regularly” he says.


While they speak well and glowingly about the mine, the two old timers don’t flinch when they bemoan the lack of developments in their village of Letlhakane. “we had high hopes that the mine would develop this village, looking back we regret that we should have demanded more developments for our region” Mawala says with a straight face.

He says that it is a shame that in 2015, Letlhakane has no street lights “with all the money that has come from the mine the village should have good internal roads and street lights” Letlhakane has no single street light and they both agree that might pose a danger to people who have to catch buses for their night shift.

“life has changed, these days stories of mine employees working night shifts being robbed or victims of crime are common, it is a big disappointment and unbelievable that the village is still as dark at night as it used to be back then in the 70’s, this is a great failure and a disservice on the part of the government and the mine” he continues, with visibly restlessness written on his face.

The two concur that unlike today, in the past it did not require a special permit to enter Orapa “people entered as they pleased. In our days, there was a lot of diamond theft. Many people stole diamonds back then and were as a result denied access into Orapa” Diepo adds.

It was then decided that permission will be restricted and a permit sought to enter the township. He says diamond theft was so rampant that the then chief of police, a certain Jack Monty was transferred to Orapa to assume the post of Chief Security Officer at the mine.

He says many such people were tried in the courts of law in Botswana and it is now impossible for them to enter Orapa, let alone for anyone with a criminal record, this he posist  is due to the mine’s high security culture. Orapa is entirely fenced, it has a high security fence, with only two manned entry points, even upon entry into the township, access is only allowed in the green area and not where the diamonds are mined.

“When I started working as Operator on December 20 1989, I thought what the mine did for the village was good enough for us, looking back I would say we have failed the young generation and should have demanded better and more developments’’ Mawala brings us back to the discussion on the villagers co-existence with the mine.


He says while his generation was satisfied with R35 which he earned when he became full operator, he wishes they had the vision to see 25 years into the future and asked the mine to cater for village developments as well, to build at least public toilets and street lights for the villagers “The mine has not developed Letlhakane, we are disappointed. Residents should stand up and demand better! Otherwise the mines will soon close, leaving the village as it was when it started operation” he declares.

Diepo adds that not even the main kgotla in Letlhakane which is the symbol and embodiment of the village’s culture, identity and development has a proper roof and is big enough.

“I must add though that when Blackie Marole was at the helm and leadership of the mine he tried his out most best, but was failed by the politics and ill advised by people who did not want to see this village prosper” he says.


He says people should visit Letlhakane to see that it is not any different from 45 years ago, save for a few structures which were not build by the mine but through the sweat and toil of local business men and Letlhakane residents, who saw opportunity in a mining environment. He says while they understand that Orapa is the administrative centre for all the mines in the region, the township has unfairly benefited, getting the bulk of all the developments at the compete exclusion of Letlhakane.


He says water and power never shuts down in Orapa no matter what happens in the rest of Botswana and it saddens them as senior citizens that Letlhakane is excluded when it also has a diamond mine “Letlhakane should be better, we live in a village with no proper sewage system, not many good gravel roads, majority of the mine workers stay here and we are surrounded by diamonds.

The dust is unbearable because we have no tarred roads! Tuberculosis is on the rise in the village. The big mine trucks, so big that we never knew trucks that big existed, have to drive on these terrible roads regularly, sending clouds of dust everywhere and causing more damage to our once peaceful and safe environment. It is time a small percentage of the profits is reserved to help the village build roads” he says hushly, as if to restrain himself.


He reveals that he remembers however that a few years ago the mine reluctantly built 55 toilets in tsikinyega ward and regularly donates cash through their corporate social investment (CSI) arm which will be one of its biggest legacy to the village, but so do many non-mining companies with CSI units he says “what would be wrong with the mine doing something more tangible to remember it by, like constructing internal roads, improving the gravel roads in Letlhakane and building a proper hospital, why should Letlhakane residents still be referred to Francistown hospitals after so many years of mine operation” he asks rhetorically.


While he acknowledge that the mines has built the one road that connects Letlhakane to Francistown, he says he will be proud of the mine if Letlhakane had a proper stadium, airstrip, good internal roads, large hospital, mine sponsored malls and street lights.

He says his consolation is that while the mine did not develop the places and regions the minerals are extracted from, it is comforting that it has helped develop the rest of the country “the mine has employed so many people over the years and changed lives positively, it has employed people from across Botswana without discrimination and that is what consoles me” he says as if in reflection.


He says while he would not like to talk too much about what might have been and dwell on the past, it still troubles him that whites who were junior and doing the same jobs as them were paid more “English people from England and some of those countries, who were doing hard labor and menial jobs, came here and were paid more than us.

That was unfair and it was never explained to us what that was about”. He remembers sadly.

He says having been involved with the mine for that long, he knows that there are still plenty of diamonds in Boteti and that more mines will spring up in the future “I do not wish to reveal too many details or cause alarm about this, but I can assure you that having been to many spaces where diamonds are found in Boteti, from the very beginning, I know there are still plenty of diamonds in this country, they will never finish” he says boldly. 

He says he however fully supports government’s strategy of not revealing too much information to citizens about diamonds as that might lead to many mines opening and a possible stock pile of diamonds or the country being attacked in a scramble and scurry for the precious rocks.

“When we begun work at the Orapa mine, we were told that it will have a life span of about 30 years, I retired after 26 years, and its life span keeps increasing. Don’t believe all this hype about the mine life span or shut down. We will die and in my knowledge there will still be digging for diamonds in Boteti. Orapa will get to cut 3, 4 and 5 and I will be proven right.

Having prospected for diamonds, evaluated then and seen some of the pits and the rocks they came from, that is my general view if you ask me about the future of diamonds in Botswana” He says with a relaxed confidence. 

He says while the mines may occasionally shutdown and experience their lows and bust, as it occurred in 2009 due to less demand for diamonds and the world economic meltdown, they will always be back up when the world economy changes and demand shifts.


Diepo, who says when he left the mine he had been Promoted many times, remembers being promoted to Geology Transport Supervisor and another promotion to senior Geology field officer, he says he is surprised that people in the same position today earn so much more. He says even white employees back then used to laugh behind his back saying he should have been paid more for the many roles he played building Orapa.

For his part, Maphane says, he was told his position was, operator, then shift foreman and later shift-foreman now dealing with blasting, to prove this he shows a scar on his leg, the injury came about during one of the blasting operations at the A/K1 kimberlite. To date, he is still seeking compensation for his injuries from the mine.


Today, the Boteti region boasts of four diamond mines, being Orapa, Letlhakane, Damtshaa (OLDM) and Karowe Boteti mines all within a 10 kilometers radios of each other. Firestone, Monak ventures, as well as other mines are said to be on the pipeline.

The Orapa diamond mine operates for 24 hours, seven days a week all year round, since 1971 and the early 2000, only halting shortly and intermittently for the plant to go for routine service and maintenance.

The average work day on the mine is eight hours. It employs hundreds of operators and miners trained on mining and earth moving machines, drilling, excavating and blasting, who burn the mid-night oil daily, in a meticulous search for life sustaining stones, all working on shifts day and night even as the nation sleeps or some employees go on strike.

The mine has its own independent water and power supplies to ensure uninterrupted around-the-clock operations ensuring that Orapa remains the one of a kind reliable supplier of rare stones, a highly trusted giver to the world that keeps on giving and it seems in the wisdom of Kgosiemang Diepo so will it be, now and in posterity.


Part two will cover the two men’s departure from Orapa mine and their journey to start work on another mine, the Letlhakane mine in 1975. Part three will cover the controversial scannex machines used in the diamond red area, where only a select few are allowed access. Part four the mine’s long term impact on the environment in Boteti. Part five will focus on Boteti Karowe Mine-a Model Mine and the Unknown story of Monak Ventures.

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Global recovery from COVID-19 remains unbalanced

2nd March 2021
Global recovery

As COVID-19 and its variants continue to cast a shadow over the world’s health systems and economies, the level of uncertainty and strength of the economic recovery will vary across countries. The real GDP in all G-20 countries is expected to grow compared to the previous year, but some countries will take longer than others to return to full capacity.

According to Mooody’s Global Macro Outlook 2021-22 report released this week, precautionary behavior and official restrictions are still hampering interpersonal interactions. The resulting toll on global economic activity has been staggering, even as the economy has also shown a remarkable degree of resilience.

Overall economic outcomes in 2020 exceeded Moody’s forecasts in most countries because of stronger-than-expected rebounds in the second half of the year. Aided by technology, many people and businesses quickly adapted so that they could carry on with daily activity with reduced in-person interactions.

However, Moody’s says the recovery remains unbalanced, with the pandemic affecting individual businesses, sectors and regions very differently. According to the group, goods demand has almost fully recovered because goods can be produced and consumed with limited in-person interactions, while the recovery in service continue to lag.

Within services, businesses that were able to effectively deliver their products at arms-length have stabilized, if not prospered. Large businesses with access to cheap funding have performed better than small and mid-sized firms. According to the report, the transportation, hospitality and leisure and arts sectors continue to languish, but the information technology, consumer goods, pharmaceuticals and financial sectors have thrived.

According to the report, many individuals around the world (including Botswana), have lost their jobs and continue to face employment uncertainty, but on the flip side, the forced decline in household consumption and the rise in asses prices have buttressed household financial balances at an aggregate level. Moody’s reported that all G-20 countries will post growth rates in 2021 and 2022, but the pace of recovery will vary significantly.

“The COVID-19 shock has exposed differences between countries in terms of political leadership, community health management, fiscal and monetary policy response, economic structures and inherent economic dynamism. Public health considerations drove the economic shock of the pandemic. In that sense, the steep declines in GDP in 2020 across advanced and emerging market countries were less a reflection of underlying weaknesses in the economy, and more a function of the combined effects of the spread of the virus and the stringency of lockdown measures,” says Moody’s.

Economic outcomes will remain closely tied to the pandemic, Moody’s said. “The quicker countries can curb the spread of the virus, the faster their economic activity will recover. Otherwise the costs of keeping parts of the economy shut, in terms of lost income and revenue, will keep adding up. The longer the crisis lasts, the more difficult it will be for governments to compensate the private sector for its continuing losses.”

Without adequate government support, Moody’s predict that large-scale deterioration in asset quality will ensue. Such detrimental effects, it says, could eventually transmit the shock through financial channels to other parts of the economy.

“We have cut or estimate of the 2020 contraction for the G-20 countries. We now expect a collective contraction of 3.3%, compared with our previous estimate of 3.8%, because of a better-than-expected recovery across a wide range of advanced and emerging market economies in the second half of the year. We expect the G-20 countries to grow by 5.3% in 2021 and 4.5% in 2022, up from our prior forecasts of 4.9% and 3.8% respectively.”

US ECONOMY TO LEAD THE GLOBAL SERVICES DEMAND RECOVERY

The US economy advanced at a 4.0% annualized rate in the fourth quarter 2020, but the headline figure masks the fact that the economy has lost momentum since November, when COVID-19 cases began to rise. Moody’s says it expects this current moderation in economic growth to be temporary. Economic momentum will likely puck up pace over the course of 2021 and 2022, supported by: enhanced pandemic control, significant additional fiscal support to the economy and a more predictable policy environment.

With infection rates now starting to fall, economic momentum should naturally pick up in the second quarter and into the summer as individual states progressively ease up social distancing restrictions, Moody’s reports.  “We believe that a stronger pandemic management response from the Biden administration, will increase public confidence and allow for a relation of restrictions over this year and next.”

COVID-19 SHOCK EXACERBATES EXISTING STRUCTURAL CHALLENGES IN SOUH AFRICA

South Africa’s economy is expected to growth by 4.5% in 2021 and by 11% in the following year, following an estimated 7.0% contraction last year. According to Moody’s, this will make South Africa’s recovery one of the weakest among emerging market countries. The economy has struggled to build momentum for many years, and as a result suffers from chronically high unemployment. The COVID-19 shock has made the economic situation all the more challenging, says Moody’s.

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BOL, MDC advised to take interest in Kavango oil tale

2nd March 2021
BOL-MDC

Reconnaissance Africa, a Canadian exploration company has started piercing the natural resource-rich lands of Kavango basin in Namibia, the company in searching for oil and gas.

The prospective area stretches into North West district of Botswana, the company through its local subsidiary Recon Africa Botswana has been given the nod by Ministry of Mineral Resources, Green Technology & Energy Security to explore petroleum mineral for four (4) years.

Amid all the negative reports around the company’s drilling activities in the Kavango basin, which covers ecosystem components feeding into the mighty Okavango Delta, the bottom line is that there are prospects of billions of dollars beneath the area in form of oil and gas-and Recon Africa is out to unearth the treasures.

Member of Parliament for Selibe Phikwe Dithapelo Keorapetse says Botswana should strive to participate in the exploration and development of these potential oil and gas deposits in the North West district. Contributing to the 2021/22 budget speech on Monday Keorapetse cautioned government against watching from afar while a potential multi-billion pula industry unfolds in the Okavango area.

He implored Botswana Oil Limited(BOL) and Mineral Development Corporation Botswana (MDCB) both state owned enterprises, to take up equity stakes in the exploration activities as early as now to “ rather than being spectators and waking up late when the foreigners are enjoying the billions”.

ReconAfrica through its subsidiary Recon Botswana was issued an exploration license under the Petroleum Act to explore for petroleum minerals in the North West District of Botswana, on 1 June 2020, for a period of four years.

“Botswana Oil as the country ‘s petroleum investment company together with MDC-a state owned mineral interest holding company must come together and acquire a stake in the ongoing exploration activities ,not to wait until Recon is making money and you say you want shares”. Keorapetse made reference to Karowe mine which Botswana’s diamond mining partner De Beers Group sold to Lucara over a decade ago while still at exploration stage.

Lucara bid on the site, and its internal partner Lundin provided a bank guarantee to De Beers for fifty million dollars, capturing some seventy per cent of the stake.Soon afterward, Lucara bought the remaining stake by acquiring De Beers’s London-based junior venture partner, African Diamonds. Lucara now owns AK6 (now Karowe Mine), having spent a little more than seventy million dollars.

The mine has since developed into a prolific rare gem producer celebrated worldwide, having unearthed some the world’s largest diamond ever in history , such as the over 1000 carats Lesedi La Rona, Sewelo and the magnificent 813 carats Constellation.

“We are now mulling acquisition of shares in Lucara but when transactions were happening in 2009 we were just spectators, we could have acquired shares back then when they were affordable now it is expensive to buy into Karowe mine, we must not make the same mistake with this oil and gas projects” said Keorapetse urging Government to be pro-active and move quickly to approach Recon Africa for a stake in Recon Africa Botswana.

ReconAfrica is a junior oil and gas company engaged in the exploration and development of oil and gas in North East of Namibia and North West of Botswana—the Kavango Basin. The company officially launched the oil and gas exploration project in Namibia in early January 2021. The exploration activities are taking place in the Kawe area, Kavango East Region, Namibia.

ReconAfrica holds a 90% interest in a petroleum exploration license in Namibia which covers the entire Kavango sedimentary basin in Namibia, the remaining 10% is owned by Government of Namibia. The exploration licence covers an area of 25,341.33 km2 (6.3 million acres), and based on commercial success, it entitles ReconAfrica to obtain a 25-year production license.

Further, ReconAfrica holds a 100% interest in petroleum exploration rights in Botswana over the entire Kavango sedimentary basin in the country. This covers an area of 8,990 km2 (2.2 million acres) and entitles ReconAfrica to a 25-year production license over any commercial discovery. The company acquired a high-resolution geomagnetic survey of the license area and conducted a detailed analysis of the resulting data and other available data, including reprocessing and reinterpretation of all existing geological and geophysical data.

The survey and analysis confirm that the Kavango Basin reaches depths of up to 9,000 m (30,000 feet) under optimal conditions to preserve a thick interval of organic rich marine source rock, and is anticipated to hold an active petroleum system.

“We believe that the Kavango Basin is another world class Permian basin, analogous to the Permian basin in Texas It is estimated that the oil generated in the basin could be billions of barrels. Recon Africa’s initial goal is to establish the presence of an active petroleum system with its fully funded 3-well drilling program starting early January 2021.

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Lucara suffers P287 million loss in 2020

2nd March 2021
LUCARA

Canadian mining company, Lucara Diamond Corporation, well known globally for producing rare gems of unprecedented quality, has not been spared by the 2020 global market downturn caused by the COVID-19 pandemic.

In their financial results for the year ended 31st December 2020, released from Vancouver Canada late Monday, the junior minor reported a significant net loss of $26.3 million for the year (approximately P287 in Botswana currency).

This according to the financials is a loss of $0.07 loss per share, which is a significant decline when compared to net income of $12.7 million ($0.03 per share) in 2019. The company which wholly owns and runs Botswana’s Karowe mine registered total revenues of $125.3 million (over P1.3 billion), a 34 percent drop compared to $192.5 million (almost P2 billion) recorded in 2019 or $335 per carat from $468 per carat in 2019.

The decrease in revenue resulted in adjusted EBITDA of $18.4 million, a decline when compared to adjusted EBITDA for the same period in 2019 of $73.1 million. Lucara executives explained that total revenue decline was a result of challenging market conditions, a longer ramp-up for production and polished sales in the latter half of 2020 under the HB supply agreement.

“As a result, revenue from certain polished diamonds from Lucara’s highest value stones that would otherwise have been recorded as revenue in 2020, is now expected to be realized in 2021.” reads a commentary alongside the figures.

During the year ended December 31, 2020, Lucara sold 373,748 carats at an average price of $335 carat. Diamond sales for the fourth quarter of 2020 were held through a combination of regular tenders, Clara, for diamonds less than 10.8 carats, and through HB under the supply agreement for those diamonds greater than 10.8 carats.

The Company recognized revenue of $42.4 million or $402 per carat from the sale of 105,648 carats. Price recovery was observed in most size and quality classes. Of note, prices achieved for goods sold on Clara (under 10.8 carats in size) in January 2021 have now recovered to the level of pricing achieved early in 2020.

For the year ended December 31, 2020, Lucara registered revenue totaling $55.2 million from the two agreements with HB, including an accrual for variable consideration of $7.2 million related to “top-up” payments arising from polished diamond sales in excess of the initial purchase price paid to Lucara.

With global restrictions impeding travel for many diamantaires, Lucara says interest in Clara grew significantly in 2020 and the number of buyers on the platform increased from 27 to 75.
During 2020, Clara began selling stones on behalf of third party sellers, which was a significant objective for the year.

“As Clara becomes the online marketplace of choice for rough buyers, discussions are underway with several producers to begin trials for the sale of their diamonds on Clara” the company said
Amidst challenging circumstances for the diamond industry in 2020 Lucara forged ahead with the Karowe mine underground project.

During the year period under review $18.7 million (over P190 million ) was spent on project execution activities including the following: Site earthworks (consisting of laydown preparation and clearing of shaft and surface infrastructure locations), geotechnical test pitting and drilling, and completion of two pilot holes at the shaft locations, a 746 metre hole for the ventilation shaft and a 768 metre hole for the production shaft.

The Company was able to complete on-site earth works and geotechnical studies by using local contractors while a State of Emergency remained in effect in Botswana.  Long lead time item orders were also placed for shaft muckers, and hoist and winder refurbishment was initiated. In addition, power line engineering and detailed shaft design and engineering (consistent with original targets for 2020) progressed.

In Q4 2020, the Government of Botswana approved the proposed powerline route and granted a 25-year extension to the Karowe Mine License to 2046, sufficient to cover the remaining open-pit life (to 2026) and the expected life of the proposed underground expansion, currently planned to 2040.

Lucara says it’s currently actively exploring opportunities to arrange debt financing for the underground expansion for those amounts which are expected to exceed the Company’s cash flow from operations during the construction period. The underground expansion program has an estimated capital cost of $514 million (over P5 billion) and a five year period of development.

President & Chief Executive Officer of Lucara Diamond Corporation, Eira Thomas said the measures that Lucara took early in the pandemic, including the decision not to sell rough diamonds in excess of +10.8 carats after Q1, helped protect and support prices for large, high value diamonds that account for more than 70% of the company’s revenues.

“These efforts in conjunction with our transformational supply agreement with HB Antwerp executed in July, resulted in strong price recoveries by Q4, a trend which has continued into 2021.”
Thomas said the recent recovery of two, high value +300 carat stones “continue to highlight the extraordinary nature of the Karowe resource and underpin the rationale for underground expansion, extending our mine life out to at least 2040”.

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