Court Dismisses African Diamonds’ Appeal against De Beers

De Beers said Wednesday that it is pleased with a court decision dismissing African Diamonds’ urgent application against the diamond giant and their joint venture company Boteti Exploration, seeking to prevent the lodging of an application for a retention license in respect to the AK6 diamondiferous area in Botswana.

African Diamonds recently declared a dispute over the terms of its Shareholder Agreement with De Beers on the project and took De Beers to court over allegations that its efforts to mine the project according to a previously agreed upon timetable were being hindered by De Beers’ refusal to move forward with the project.

African Diamonds also offered to buy De Beers’ stake in the project, saying that it would build, “an efficient, effective, reliable mine cheaper than the De Beers model…It makes no sense to African Diamonds, our local partner Wati or to the people of Botswana that the benefits from developing the mine should be denied,” according to Chairman John Teeling.

A statement released by De Beers Wednesday said that In the High Court in Botswana, Acting Judge Gabriel Rwelengera ruled that African Diamonds’ application was dismissed with costs.

In the course of his judgment, it was found that “Boteti is bound by the terms of its Diamond Marketing Agreement and that these cannot be changed without De Beers’ consent and that De Beers’ arguments in the matter were convincing.”

De Beers maintains its position that developing a mine “while knowing that it is likely there will not be sufficient power available would result in an unsustainable and non-viable project.”

“To secure the project by means of a retention license is the right way to maximize the benefits of AK6 for the Boteti shareholders, other stakeholders and the citizens of Botswana. De Beers is enthusiastic about AK6 and remains fully committed to seeing it come into production,” the statement said.

African Diamonds had not released a reaction at time of press.