Fluor Wins EPCM Contract at Botswana's Jwaneng Diamond Mine

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Researched by Industrial Info Resources (Sugar Land, Texas)--Debswana (Gaborone, Botswana), the diamond-mining joint venture of De Beers (Johannesburg) and the government of Botswana, could invest $3 billion in the next 15 years to expand and extend the working life of the Jwaneng diamond mine by seven years, allowing the mine to remain active through 2025.

The program will require a capital investment of $500 million. Added to this will be the cost of covering various project stages, such as feasibility studies, design and engineering, implementation, and equipment. DeBeers has said that the Cut-8 expansion at Jwaneng will represent the largest single commitment of capital in the private sector ever made in Botswana.

Fluor Corporation (NYSE:FLR) (Irving, Texas) completed the Cut-8 feasibility study for Debswana early in 2009. In the last quarter of 2009, Fluor received the contract for the $450 million procurement and construction management phases of the project. Fluor now has won the full engineering, procurement and construction management (EPCM) contract. The open pit will be expanded to facilitate access to the kimberlite ore at greater depth. The expansion includes relocating and rebuilding portions of the existing surface infrastructure that will be impacted by the pit expansion.

The project will provide an estimated 95 million additional carats from Jwaneng. Between 2010 and 2024, the extension will require 700 million tons of waste and expose another 78 million tons of diamond-bearing ore. The Jwaneng pit will be deepened to 650 meters. The project will create 1,400 jobs at peak employment.

At the end of 2009, De Beers said that the diamond market is set for long-term growth as an increasing number of individuals with high net worth emerge in China and India. At the same time, no major diamond discoveries have been made for more than a decade, and demand is likely to significantly outpace the forecast lower supply for some time. The Jwaneng mine, the largest diamond mine in the world by production value, contributes about 70% of Debswana's total revenue. The Debswana joint venture creates 50% of Botswana's public revenue, 33% of the country's GDP, and 80% of foreign earnings.

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