Friday, July 25, 2008

African Diamonds Declares Dispute over AK6 Joint Project with De Beers

AIM-listed Botswana diamond exploration company African Diamonds has said that De Beers will not accept the terms of the mining license from the Botswana government on the AK6 diamond deposit. De Beers, it added, wants to delay the project, citing power supply as the main reason.

African Diamonds, which made an offer to purchase De Beers’ stake in the mining project, with an aim at developing the mine according to a timetable submitted to the government, has declared a dispute in the terms of the shareholder agreement, according to Thomson Financial.

De Beers was not immediately available to comment.

African Diamonds has a 28.38 percent stake in Boteti Exploration, its joint venture with De Beers on the project. In April it was announced that Boteti’s mineral license application had been approved by the government.

“The shareholders of Boteti anticipate that the final negotiations will be concluded with sufficient time to enable AK6 to be in production by the end of 2009,” the April statement read.

John Teeling, chairman of African Diamonds, said at the time, “We believe we have the full backing of De Beers and the government of Botswana to move this world-class project toward production.”

De Beers has claimed that the economics of the project are hindered by power supply issues. It therefore reported to the board of Boteti that the project should be delayed.

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