Working to Keep Africa's Diamond Flow From Drying Up

On the southern fringes of the Kalahari desert to the west of Gaborone, it yields about as much by carat weight as all the mines of South Africa -- once the great power of the diamond industry. And most of the stones it produces are gem-quality.

The terraced cavity is already a dizzying 1,000-plus-feet deep and the digging is continuing. But mine managers say production has probably peaked, and that in eight to 10 years the operation will have to move from open-pit to more expensive underground mining.

Botswana is the world's leading source of diamonds by value, and second only to Australia by volume.

But output from its four active mines, all run by Debswana Diamond Co., De Beers' 50-50 joint venture with the government, is expected to level off over the next five years, after edging up to a record 31.9 million carats last year.

Blackie Marole, Debswana's managing director, talks of optimizing operations by increasing efficiency and re-treating waste dumps to extract maximum output.

Last year saw setbacks at Botswana's oldest mine at Orapa, in the center of the country, which has been in production for 35 years.

The Orapa deposit is one of the largest "pipes" of diamond-bearing kimberlite being exploited anywhere.

People in the industry say existing finds are sufficient to last at least another generation. But De Beers and a clutch of other companies are stepping up the search for new ones.

Having already spent about $100 million prospecting in Botswana over the years, De Beers has brought in heavy weaponry in the form of a zeppelin with geophysical survey equipment. The airship is said by the company to be the only one of its kind and capable of detecting likely ore deposits under deep layers of Kalahari sand.

Rival companies are also intensifying efforts to gain a share of the bonanza that has made Botswana.

South African-based Petra Diamonds Ltd., which last year took over ownership of Kalahari Diamonds, is prospecting in a partnership with Australia's BHP Billiton using airborne technology.

"I expect we'll have a lot of targets to draw," said Adonis Pouroulis, Petra Diamonds' chairman. BHP Billiton has "back-in" rights in the event of a commercial find.