Debswana Aims for $1 Billion Funding Raise to Expand Jwaneng Mine

Debswana plans to raise $1 billion on global capital markets for an underground expansion of its Jwaneng mine, which is crucial as its open pit operations will conclude by 2034. The company faces reduced production due to challenges in the diamond market but remains hopeful about future recovery in the sector.

Debswana, Botswana’s foremost diamond mining entity, is targeting a $1 billion capital raise on global markets to facilitate an underground expansion at its flagship Jwaneng mine. This operation, a joint venture between the Botswanan government and De Beers, is crucial as the open pit portion is projected to be exhausted by 2034. Transitioning to underground mining could extend operations until 2054, according to Managing Director Andrew Motsomi, who addressed a mining conference in Gaborone on June 17.

Despite a downturn in the global diamond market, Debswana is proceeding with its ambitious plans. Recent announcements indicate that production will drop by 16% leading into 2025, after already reducing output by 27% in 2024. The decision to push for funding is part of a broader strategy, including acquiring an international credit rating that would allow access to global financing.

Motsomi pointed out that the decline in revenue has resulted in increasing capital demands on the company. Historically, Debswana has spent an average of BWP5 billion (approximately $373 million) annually over the last five years, but projections are showing a spike to BWP8 billion per year moving forward as they adapt to market conditions.

In a hopeful note, Minister of Minerals and Energy, Bogolo Joy Kenewendo, shared her optimism regarding a recovery in the diamond industry, potentially starting in 2026. “Since January, we have begun to see positive signs in the market. While we are not yet where we want to be, the upward trend is encouraging and gives us hope for a more robust recovery in the latter half of the year,” she told stakeholders.

Founded in 1969, Debswana holds a significant position in the global diamond industry, producing both in terms of value and volume. The company operates four key mines: Jwaneng, Orapa, Letlhakane, and Damtshaa, with its interlinking headquarters situated in Gaborone.

In summary, Debswana is gearing up for a significant funding initiative, eyeing $1 billion to expand its Jwaneng mine underground, ensuring its operations continue past 2034. This move comes amid tough market conditions, but the company’s leadership remains optimistic about a market rebound. Minister Kenewendo’s remarks on emerging positive trends lend further hope for the industry’s revival.

Original Source: www.intellinews.com