Botswana, De Beers approve $1 bn deal in world's top diamond mine

JOHANNESBURG - Botswana and global diamond giant De Beers have approved a $1 billion investment to dig under the world's richest diamond mine by volume, their joint venture said on Wednesday.

The Debswana Diamond Company's board said it has given the go ahead to works that are to extend the life of the Jwaneng mine turning it from an open-pit site to an underground operation.

READ: Bostwana, De Beers strike new diamond sales deal

The mine accounts for about 70 percent of profits for Debswana -- a 50-50 joint venture between the government and De Beers, which auctions most of the gemstones.

The move, which comes amid a global drop in demand for the precious gems, will extend its life span by 20 years and yield up to nine million carats per year, the firm said last year. 

"Investing in underground operations is... fundamentally important to the future of Botswana as a nation, to the long-term ambitions of the De Beers Group, and to the supply outlook for the global diamond industry," said De Beers CEO Al Cook.

Botswana is Africa's leading diamond producer and diamond mining accounts for a third of its GDP. 

Last year the government and mining giant Anglo American, the majority owner of De Beers, reached a deal which provides for a new 10-year agreement to sell the rough diamonds produced by Debswana and a 25-year extension of its mining licenses.

Diamond miners across the region have often had to dig deeper, shouldering higher costs, in recent years as gems closer to the surface deplete.