Mining companies in South Africa forced to dig deeper as De Beers presses ahead with $2bn underground mine

De Beers, one of the world’s largest mining companies, is digging deeper in a bid to combat the ever growing difficulty of diamond mining in South Africa.

The company are constructing a new $2billion mine underneath the already existing 450m deep Venetia mine, close to the border with Zimbabwe and Botswana.

Converting from an open pit mine to an underground mine 1,000m below ground, the Venetia mine is predicted to become one of the world’s five biggest diamond mines following its completion in 2022.

The decision to dig deeper to exploit the diamond rich site highlights something of a gamble for De Beers, but a gamble that could pay off quite substantially according to Ludwig Von Maltitz, De Beers Venetia GM.

“Worldwide, the easier diamond sources have probably been found, but with this resource here, we hope we have something we can extend well into the future,” he said.

This optimism is not matched by others in the industry as the price of diamonds has fluctuated tremendously over the last eight years, something that De Beers has suffered from – closing down two of its mines in Canada and Botswana in 2015.

Peter Major, mining specialist at Cadiz Solutions in Johannesburg, believes that De Beers’ new project is “stupendous”.

“We are often told that the growing world population, combined with the increasing difficulty of finding diamonds, will mean prices will always rise, but we will see. The project at Venetia is stupendous – especially as very few other firms are investing in SA,” he said.

Despite the uncertainty in the market, Venetia is expected to operate until at least 2043 – with belief that it could be operate even longer.

“If we can do it well enough, I can’t see why mining should not be a lucrative business going forward.” Said Mr Maltitz.

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Read the May 2016 issue of Mining Global magazine.