De Beers Asks Court to Prevent Prospecting at Big Hole Tourist Center

The saga stretches back about five years, when a group of Kimberley residents approached diamond explorer Tawana Resources. They were looking at the viability of diamond deposits still remaining around the old St. Augustines diamond mine, and wanted to see if Tawana would be interested in coming in with them if they found something there.

St. Augustines is about 600m west of the Big Hole, which produced 14,5-million carats of diamonds before mining ceased in 1914. The St. Augustines kimberlite was mined in the late 1890s and its diamonds were identical to those found in the Big Hole because it appeared to be located on the same geological structure.

The mine closed in 1902. But it was only mined to a depth of about 240m, compared with the Big Hole at more than 1km deep.

The Kimberley residents formed a company, Vecto Trade 436, which applied to the minerals and energy department for a prospecting licence and was granted the licence last August. At that point, Tawana took a 30 percent stake in Vecto Trade.

Tawana, listed on the JSE and Australian Stock Exchange, is in a joint venture with De Beers in the Pilbara Exploration project in Western Australia.

Tawana managing director Wolf Marx said the licence covered two areas of ground, one to the north, which is owned by the municipality, and one to the south, over which De Beers holds the surface rights.

De Beers planned to build a hotel on that area and, in partnership with the government, would also build a conference center.

Marx said Vecto Trade had no interest in that part of the property and had told De Beers so.

Asked whether mining operations from the northern side assuming the partners found that a mine would be viable would encroach on the hotel and convention center, he said it was perfectly possible to mine underneath housing without causing disruption. Most Johannesburg residents, he said, "understood this not only because of old mining activities, but because the Gautrain tunnels were being built under housing."

In a statement, Tawana and Vecto Trade said it would be grossly unfair to deny Kimberley the benefits of redeveloping St. Augustines if it was found to contain a still-viable deposit.

"Vecto Trade and Tawana Resources have approached all stakeholders, including De Beers, involved in the development of the Big Hole precinct as a tourist center and diamond hub and assured them of our support," they said. "We genuinely believe that our proposed activities will enhance this development."

"We will bring diamond exploration and hopefully production, cutting, polishing and distribution into the area, making it a unique diamond hub with global tourist and business appeal," they said.

The Big Hole tourism development is a joint venture between De Beers, provincial and local governments, and tourist authorities. It is intended to provide jobs and sustainable economic activity for the Kimberley and Northern Cape area as De Beers diamond mining in the area has dwindled. Work on the project began in 2004 and the second phase was completed last year. The development includes a 13-room guesthouse and a visitor centre with diamond displays, coffee shop and curio stores.

In the past two years, De Beers has sold its underground infrastructure at Kimberley, which it closed in 2005, to Petra Diamonds and outsourced the treatment of some of the dumps, from which diamonds can still be recovered using modern technology. But it still has surface operations in Kimberley through the Combined Treatment Plant.