Miner Gem Diamonds has placed the development of a plant at one of its projects in Lesotho on ice as it aimed to save cash given the current global economic climate.
On Monday the company said the main elements of project Kholo in Lesotho, Africa, would be pursued. The development of this project started in June this year.
“But these elements would be executed in the most appropriate manner given the current financial climate, with a view to reducing cash outflow in the short term,” the company said in a statement.
Last month, Gem Diamonds said it had started a review of the Kholo project.
The company owns two production mines, the Letšeng mine in Lesotho of which the Kholo project is a part of and the Ellendale mine.
Gem Diamonds owns 70 percent of Letšeng Diamonds, the government of the Kingdom of Lesotho owns the remaining 30 percent.
Operated by De Beers from 1977-1982, Letšeng reopened operations in 2004 and was acquired by Gem Diamonds in late 2006 for $118.5 million.
Letšeng continues to deliver exceptional returns for its shareholders, with annual production rising since the takeover from 55.000 carats in 2006 to 112.367 in 2011.
Letšeng processes ore from two kimberlite pipes, Main and Satellite, both bearing extremely low grade ore (under two carats per hundred tonnes), as well as from existing stockpiles. The mine can currently process around 7 million tonnes of ore a year, producing about 100.000 carats.
Letšeng is famous for its large, top quality diamonds, with the highest percentage of large (+10.8 carat) diamonds of any kimberlite mine, making it the highest dollar value per carat kimberlite diamond mine in the world.
Letšeng is also renowned for its production of historic diamonds.
In August 2011, a 550 carat white diamond, the Letšeng Star became the fourth major recovery at Letšeng since Gem Diamonds’ 2006 takeover.
It was preceded by the 478 carat Leseli la Letšeng (‘Light of Letšeng’) white diamond in 2008, the 603 carat Lesotho Promise white diamond in 2006, and the 493 carat Letšeng Legacy white diamond in 2007.
Add the 601 carat Lesotho Brown, recovered in 1960, and Letšeng has produced five of the 20 largest documented rough white gem diamonds on record.