SmallCapNews | African Diamonds argues with De Beers over Botswana diamond mine

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African Diamonds argues with De Beers over Botswana diamond mine

Thursday, July 24, 2008

African Diamonds has launched a shareholder dispute against De Beers, its partner on the AK6 diamond deposit at Orapa in Botswana.

The move comes after De Beers stalled over negotiations with the Botswana government over where diamonds from the AK6 deposit would be sold. The government wants them auctioned inside Botswana while De Beers wants them sold to its own Diamond Trading Company.

De Beers is now arguing for a delay to the project, citing power supply issues. This has been rejected by African Diamonds, which owns a 28% stake in the licence and Wati, which owns 1%.

African Diamonds said it had made an offer to De Beers to acquire its entire interest in AK6 but that this had not been accepted. It also said that auctioning the diamonds locally could fetch prices up to 40% higher than those estimated by De Beers.

The companies are now set to meet in arbitration in Gaborone, Botswana.

Jim Finn, finance director of African Diamonds, said that if the two companies could sort out their differences he was quite happy to move ahead and have the mine developed with DeBeers.

“The terms have been offered by the government and we’d like to accept them and get the mine working,” he said.