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Nicky Oppenheimer, De Beers
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Oppenheimer takes leap in R1.2bn venture
Allan Seccombe
Posted: Mon, 23 Oct 2006

[miningmx.com] -- AS De Beers raised the curtain on its first new mine in almost a decade, one couldn't shake the feeling this was an act of faith just as much as it was a bold economic and political ploy.

That's because the R1.2bn marginal mine - started (perhaps presciently) at a time when diamond prices are under pressure - was mined for only six years from 1906 and still uses resource estimates gleaned from periods of exploration in the Sixties and Seventies, and the early part of the last century.

As such, Voorspoed - as the mine has become known - commands considerable space in Oppenheimer family lore.

“My grandfather said to my father, as he said to me: Voorspoed diamonds are very nice. I hope they are right,” Nicky Oppenheimer, chairman of De Beers, said at the sod-turning ceremony at the project near Kroonstad in South Africa's Free State province.

By way of dating the project, it's worth knowing that Ernest Oppenheimer, the founder of De Beers, was buying diamonds in Kimberley around the time when Voorspoed was producing its 950,000 carats from 4.2 million tons of rock.
Voorspoed diamonds are very nice
But it's not just comely family myth that stands behind the opening of Voorspoed. Far from it. Political and social pressures brought to bear on the company have helped motivate the building of the mine. De Beers, having shut its Koffiefontein mine last year, is under pressure to contribute, and to be seen doing so.

The Voorspoed mine and plant will be commissioned from the second quarter of next year and ramp up to full production of 700,000 to 800,000 carats in mid-2009. It will employ up to 400 people. The life of mine under current plans is estimated at between 12 to 16 years, producing eight to 10 million carats in that time.

The 400 metre deep mine could go underground in some sort of extension programme. There are also tailings dumps that could be put through the plant to ensure it runs at full capacity, said Andy Taylor, Voorspoed’s operations manager. Other than that, the life of mine is relatively short.

The three million ton dumps have a grade of about four carats per one hundred tons based on sampling work done in the 1960s. The mine has a grade of 20 carats per one hundred tons.

“We will definitely be doing some sampling on those tailings to see if it would be economical to put through the plant. There is some potential upside here,” Taylor said.
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The last mine De Beers brought into production in South Africa was the Venetia mine in 1992.

“It’s a marginal mine and we have to run a very tight ship,” said David Noko, MD of De Beers Consolidated Mines, the South African operations arm of the diamond group. He said debt funding for the Voorspoed project had been secured from banks.

Oppenheimer told South African mines minister, Buyelwa Sonjica, that De Beers wanted to talk to the minerals and energy department about securing prospecting licences. “Prospecting is what De Beers must and should be doing in South Africa to ensure a future in South Africa,” he said.

Of the 650 applications received in the Free State since May 2004 for mining, prospecting rights as well as conversions of old order rights to new order rights, almost two thirds were for diamond projects.