MARINE MINING: Debmarine Full Steam Ahead
Recent Western Cape Business News
WHEN the world diamond market crashed in 2008/2009 its ramifications were felt almost immediately in the marine engineering sector of Cape Town.
All of the diamond mining vessels belonging to the De Beers Group including the Grand Banks, Debmar Atlantic, Debmar Pacific, Gariep and Ya Toivo (all Debmarine Namibia vessels) as well as the De Beers Consolidated Mines vessel, the Peace in Africa, tasked to operate off the South African coast as well as two sampling vessels, the Douglas Bay and the Coral Sea, were put at anchor in the Port of Saldanha to ride out the price collapse storm.
As De Beers Marine in Cape Town provides operational and technical support to all the vessels its call on the products and services of the Cape Town marine engineering sector almost completely fell away. In the good times of the early 2000’s capital expenditure on these vessels ran well over R400 million a year, it is estimated.
Now, it seems, the sparkle is brighter for the diamond market. Prices are up by more than 30% (for sizes 1 to 2 carats) compared to 2007 for example and the indications are that the mid- to long-term outlook remains positive due to constrained supply and strong demand growth from emerging markets.
And while rough diamond prices are likely to remain flat at current levels, this year they are good enough for De Beers Marine to have gone full steam ahead with its sea diamond mining effort off the coast of Namibia.
Stella Auala, spokesperson for Debmarine Namibia, tells CBN the company is currently operating at 100% of its fleet capacity with a total of five mining vessels. The Grand Banks, which was on a lay-up period of three years has now been re-commissioned. With the increase in the production fleet, Debmarine Namibia is also focusing on increasing resource development capacity, according to Auala.
Debmarine mines in the off-shore mining license area off the southern coast of Namibia in water depths of between 70 and 140 meters. Since 2006 a million carats per annum were mined until the 2008 slump.
The company’s mining license area cover a total area of about 6 000 square kilometers and since mining commenced in the early 90’s, some 74 square kilometers have been mined to date, Auala says.
Last year Debmarine Namibia produced 990 000 carats and the indications are that the one million carat mark will easily be surpassed this year.
The Peace in Africa, originally tasked to mine the South African deposits just south of the Namibian treasure chest (it is owned by De Beers Consolidated Mines) is proving to be the star performer. The vessel is expected to produce an estimated 330 000 carats annually, equating to around 30% of Debmarine Namibia’s total production.
The Peace in Africa is currently the largest mining vessel in the fleet, and the only vessel using the crawler-mounted dredge technology. The Peace in Africa mines in Namibia’s Atlantic 1 mining license, on a six year charter, from De Beers Consolidated Mines as from October last year.
Those knowledgeable of the marine mining sector speculate that the De Beers effort has changed with a move from maximum production to focus on improved productivity – that is, improved profitability per carat produced.
That would explain the hard-working Peace in Africa’s move from the South African waters to those of Namibia, where the diamonds are reputed to be of better quality and in more abundance.
Originally built with a capacity of close 240 000 carats a year, its current production rate of 330 000 carats is breathtaking and an indication that De Beers quickly want to make good for earlier poor results.
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