JOHANNESBURG: De Beers, a unit of Anglo American , said it is spending 20 billion rand ($2.27 billion) on a new underground diamond mine that will become the largest in South Africa.

The planned investment is a rare vote of confidence in South Africa's mining sector, which was rocked last year by a wave of violent wildcat strikes.

Anglo American's platinum arm, Anglo American Platinum , is seeking to mothball two of its South African mines and cut up to 14,000 jobs, in the teeth of fierce political and union resistance, as it attempts to restore its profits.

The diamond mining company and marketer said it would create 3,000 jobs at the new underground mine at Venetia, which is currently operating as an open-cast operation, in Limpopo Province, in the north of the country.

De Beers said the new mine would extend the life of Venetia until 2042 and replace the open pit as South Africa's largest diamond mine.

Philippe Mellier, CEO of the De Beers Group, said the investment would enable the company to provide greater certainty around long-term supply.

"This new underground mine will provide a large and predictable supply of rough diamonds for decades to come."

Anglo American on Friday posted a sharp drop in 2012 earnings, hit by tumbling earnings from all core units and writedowns to the value of its troubled platinum assets and the flagship Minas Rio iron ore project in Brazil.

 

Source : economictimes.indiatimes.com