Karowe Diamond Mine Expansion Faces Challenges

By Mike Visser

Image By: SHEILA BARRADAShttps://www.engineeringnews.co.za/print-version/karowediamond-mine-underground-expansion-botswana-update-2021-07-16

Botswana’s Lucara Diamond Corp. encounters setbacks in its ambitious expansion plans for the Karowe diamond mine.In an unexpected turn of events, Lucara Diamond Corp. revealed this week that the underground expansion project at the Karowe diamond mine is encountering hurdles, leading to prolonged timelines and escalated expenses. Initially projected to proceed seamlessly, the expansion now faces a prolonged period and an increased budget due to unforeseen underground water complications.

Lucara disclosed that the subterranean conditions harbored more water than anticipated, necessitating extensive grouting operations to mitigate potential leakage. Grouting, a standard technique in underground mining, is essential for preventing groundwater infiltration into the mining area.The company anticipates an 18-month delay in the initiation of underground production, shifting the projected start from the latter half of 2026 to the initial half of 2028. Moreover, the cost projection for the expansion has surged by 25 percent, soaring from the estimated $547 million in May 2022 to a revised figure of $683 million.Despite these setbacks, Lucara remains resolute in its commitment to the project. The Lundin Group, Lucara’s principal shareholder, affirmed its unwavering support for the venture in the wake of these challenges.

Adam Lundin, a Lucara director, highlighted the significance of the expansion, emphasizing its access to the most lucrative section of the orebody, responsible for yielding several extraordinary diamonds, including record-breaking specimens exceeding 1,000 carats.Among the remarkable diamonds unearthed at Karowe are the 1,109-carat “Lesedi La Rona,” purchased for $53 million by Laurence Graff in 2015, and the 1,758-carat “Sewelô,” among other notable finds.Despite the setbacks, Lundin maintained the project’s economic viability, expressing continued solidarity as Lucara’s largest shareholder.Lucara had announced its strategic shift to underground mining at Karowe back in 2019.

The expansion aims to extend the mine’s operational lifespan until at least 2040, effectively doubling its longevity. Forecasts predict an additional revenue influx of $4 billion based on conservative diamond price estimates.Karowe commenced operations in 2012, with the open-pit section slated for exhaustion by 2026. Lucara reassured stakeholders on Sunday, affirming sufficient stockpiles of kimberlite ore from various sections to sustain ongoing operations during the delay.Moreover, the company remains optimistic about the long-term prospects of diamond prices, coupled with the mine’s capacity to yield exceptional gems.

The continued strong performance of the open pit further augments the potential to mitigate the financial impact of the anticipated delay.The Karowe expansion saga reflects the inherent challenges in the diamond mining landscape, showcasing Lucara’s resilience in navigating unforeseen obstacles while upholding a vision for sustained growth and profitability in the industry.

Related Stories:
The future of diamond mining in Botswana: Challenges and opportunities
Sustainability efforts in the diamond mining sector: A closer look at environmental impact
Exploring the allure of exceptional diamonds: What makes them unique?
As Lucara Diamond Corp. grapples with the hurdles in the Karowe expansion, the diamond industry watches keenly, awaiting further developments in this unfolding narrative.

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