DiamonEx Botswana’s Lerala Mine to Resume Production This Year

DiamonEx Botswana Ltd. will open its Lerala mine before the end of the year, an official from the parent company said.

The mine, which is 20 percent owned by Milton, Australia-based DiamonEx Ltd. (DON), closed the operation in late 2008 as demand for the gems dropped because of the global economic slowdown, said Mark Gray, a consultant with Fleming Asset Management Botswana, which holds 80 percent of the Botswana unit.

“For the next three to four months, contractors will be at the mine to do some modifications in preparation for the resumption of operations in the fourth quarter of the year,” he said.

DiamonEx shares were suspended from trade on the Australian and Botswana exchanges and delisted from London’s Alternative Investment Market in March 2009 after the Botswana unit was placed under judicial management two months earlier, granting the company immunity from claims by its creditors. Fleming, representing holders of convertible bonds in DiamonEx Botswana, assumed responsibility for the company’s debt when it bought the Australian miner’s stake in March 2009.

The Lerala mine was expected to produce 330,000 carats a year over its 10-year lifespan, former managing director Dan O’Niell said in March 2008.

To contact the reporter on this story: Jerry Bungu in Gaborone via Johannesburg on pmrichardson@bloomberg.net.

To contact the editor responsible for this story: Antony Sguazzin in Johannesburg at asguazzin@bloomberg.net.

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