De Beers, Namibia to spend $468m on world's first custom-built diamond searching ship
Debmarine, a 50/50 joint venture between world's No. 1 diamond producer by value, De Beers, and the government of Namibia, will build a $468 million-diamond recovery ship, the world's first custom-made vessel of such a kind and the seventh in the company's fleet.
The vessel, slated to start operations in 2022, would add about 500,000 carats per year of production capacity to Debmarine Namibia's output. This, Anglo American's diamond unit De Beers said, represents an increase of about 35% on current output levels.
The vessel, slated to start operations in 2022, would add about 500,000 carats per year of production capacity to Debmarine Namibia's outputAnglo's chief executive, Mark Cutifani, noted that the addition of the first-of-its-kind vessel would bring numerous benefits in terms of De Beers' production profile by value and volume, as well as the technologies that can be deployed from the outset for greater efficiency and productivity.
Cutifani added the investment offered a three-year payback, a more than 25% internal rate of return and an earnings before interest, taxes, depreciation and amortization margin of more than 60%.
Debmarine Namibia last ordered a new vessel in late 2017. At the time it was projected to cost $142 million and was expected to start operations in 2021.
The company operates five diamond mining vessels and one exploration and sampling one, the mv SS Nujoma. They comb the ocean floor using advanced drill technology, supported with tracking, positioning and surveying equipment.
Dredged gravel is sifted at treatment plants onboard the ships. The leftover material is returned to the ocean and recovered diamonds are securely sealed in containers, loaded into steel briefcases, and flown by helicopter to shore.
No human hands touch the diamonds during the entire production process at sea.
Worth the investment
Namibia has over 3,700 square miles of marine diamond concessions along its south-west coast, which is expected to support the industry for the next 50 years.
Debmarine has a license to operate off the coast of the African country until 2035 within a 2,316 square mile area - just under half the size of Jamaica.
The company began marine mining operations in 2002, with a haul of approximately 500,000 carats. At the time, sister company Namdeb's land operations were producing around a million carats.
But over the years the tables have turned and marine operations now account for about to 75% of total diamond production in the country, according to Namibia's Chamber of Mines.
While marine diamonds may be challenging to find, they're certainly worth the effort. According to Debmarine's own estimates, 95% of the precious rocks recovered from the sea are of "gem quality," compared to just 40-60% of those mined inland.