De Beers Consolidated Mines had no intention of reducing its interests in SA, and would increase planned investment in its Venetia mine in Limpopo by R5bn to R15bn in a show of confidence in SA’s mining future.

The assurance by CEO Phillip Barton came amid concern expressed at a mineral resources committee hearing in Parliament yesterday that the company was withdrawing from SA.

Large resource groups such as BHP Billiton and Rio Tinto have sold several mineral assets in SA. Miners have expressed concern about the African National Congress (ANC) Youth League’s call for the state to seize SA’s mines; soaring electricity and labour costs; power shortages; and rail and port constraints.

Mineral Resources Minister Susan Shabangu is conducting road shows in Australia and Britain to quell fear and talk up the investment potential in mining to drive up employment.

De Beers Group had signed a new $2bn multicurrency credit facility in London, which its CEO Philippe Mellier said would provide the necessary capital to fund several large, upstream projects under way and take advantage of the exceptional growth in markets such as China and India.

The Venetia mine would not benefit from this funding and De Beers Consolidated Mines would have to raise capital to convert it from an open-pit operation to an underground mine.

The increase in the planned investment in Venetia was to take account of escalation costs over the seven to eight years of the project, Mr Barton told journalists after briefing the mineral resources committee on progress in meeting the objectives of the mining charter.

He attributed the perception that De Beers was cutting back its exposure in SA to the fact that it had sold off five mines over the past three years so it could focus on its higher-yielding projects.

"We have taken a long, hard look at all our mines and decided we would rather have a superior return on capital employed than just push volumes. This required a fundamental shift in our strategy," Mr Barton said. There was a concentrated focus on Venetia, Voorspoed and the tailings at the Kimberley mine.

The R15bn would be invested over the next seven to eight years in the new underground mine at Venetia. It has one of the world’s top five deposits and generates about 80 percent of De Beers output.

Mr Barton said the R150m feasibility study would be completed in February and taken to the board in May. Mining work would have to begin next year if there was not to be a hiatus between the existing open-pit mine and the planned underground operation.

In addition, De Beers would be spending R1bn a year until 2017 opening up the Venetia mine and about R400m on Voorspoed.

Mr Barton said unlike other mining companies, De Beers still believed in SA offering opportunities for further exploration. "We are firmly believing in finding De Beers’ next diamond mine in SA," he said. It was exploring the land around Finsch.

Ian Farmer, CEO of Lonmin , the world’s third-biggest platinum producer, highlighted the risks of doing business in SA at the committee meeting — ranging from talk of nationalisation, labour unrest, rising costs, and legislative ambiguities to shortages of skills, electricity and water.

Ms Shabangu told a Deutsche Bank conference in London yesterday that "no matter how often our government states the obvious, that nationalisation is neither South African government policy, nor is it ANC policy; the controversies and potential fears do not seem to disappear".