IRISH EXPLORATION company African Diamonds, which is listed on the Aim and Botswana markets, has deferred a court action against De Beers in a dispute over their AK6 diamond mine joint venture prospect in the Orapa region of Botswana.

African Diamonds was bringing the case after De Beers had sought a retention licence which would have allowed it to delay the development of the mine indefinitely.

In a statement, African Diamonds said it wanted to defer the court action in light of positive progress in the AK6 dispute. That followed a decision by the director of mines of Botswana to deny De Beers's application for a retention licence, as a mining licence application was still pending.

A joint-venture company, Boteti, in which De Beers has a 71 per cent stake, African Diamonds has a 28 per cent stake and a private Botswana firm, Wati, has the remaining 1 per cent, received the terms for a mining licence from the government of Botswana on June 17th.

It is understood the licence terms were not in line with how De Beers would normally buy diamonds from a mine. One of the terms of the mining licence requires the diamonds from the mine be auctioned in Botswana.

De Beers and the Botswana government have now agreed to market AK6 diamonds through the Diamond Trading Company Botswana in a similar fashion to current Debswana production. Debswana is an equal joint venture between De Beers and the Botswana government.

"Difficulties with the marketing of the diamonds have been ironed out," African Diamonds chairman John Teeling said.