After futilely waiting for tangible returns from its Ghaghoo mine project in Botswana, Australian miner, Gem Diamonds, has halted operations with immediate effect.
According to a press statement from the company, diamonds from the operation, which started in 2011, have been fetching low prices with no sign of a change in fortunes and closure was the only option.
Commented the company last week Thursday: “The material fall in the prices of its diamonds from $210 per carat in early 2015 to $142 per carat at its most recent sale in December 2016 emphasises the weak state of the diamond market for this category of diamonds.
The Ghaghoo mine project has failed to reach the envisaged commercial production target of 150, 000 carats a year. The mine delivered 91,500 carats in 2015 and nearly 41,000 carats in 2016.
Indicating that the decision was only a temporary measure, Gem said it would monitor market conditions to decide when to restart the mine profitably.
Ghaghoo, the first underground diamond mine in Botswana, has been a difficult mine to build. A shaft was sunk through an 80m-thick layer of Kalahari desert sand in a remote location in the north of the country. So far, Gem has spent about $85m on developing the first phase of the mine. Gem has not succeeded sustaining projects, besides Letseng mine in Lesotho.