Just saw this on SH. Some interesting stuff towards the end of the article.
Date : December 3, 2003
World Diamond Conference In Perth Spreads the Word About Continuing Rise In Rough Diamond Prices.
Mining Conferences at both ends of the world as time runs out on a very good year for the mining sector. This time last year there was little money available for exploration companies, this time around the money seems to be chasing the companies. No, it is never that easy as the projects have to be good and the management has to stand up under fire, but the spate of new issues in Australia indicate that some investors are getting less than fussy. Anyway back to the Conferences. London has what is called The Mining Journal World Congress – Mines and Money which starts officially tonight, while Perth has been hosting the World Diamond Conference for the last couple of days.
Grand titles both and it is already being forecast that Mines and Money will be a success. A prize is being offered, however, for the name of someone who has paid full whack for his, or her, ticket . According to the brochure these are priced at £625 each and include a dinner on Wednesday evening for which dinner jackets have to be worn. In fact the full shebang involves drinks tonight courtesy of Loeb Aron and two full days of presentations and seminars. Thankfully there is a decent period allocated for lunch and it is not dry like the dismal Emerging Market Conferences that used to be run in London by the US group who do Indaba. Incidentally, this group is threatening to return next May with a conference taking place somewhere up the Edgware Road.
Even this would be more convenient than the Excel Exhibition Centre where Mines and Money is due to take place. As a guide to its whereabouts the Mining Journal offers the one word, London. Apparently it is way down beyond Canary Wharf and even some taxi drivers have never heard of it. A few jet lagged guests may not make it back to their hotels until the next day as there will not be much transport around there at 1 am when the dinner ends. Still if they have not paid for their tickets, they can hardly argue. The Louthean group chose Scarborough Beach as the venue for the World Diamond Conference. It is about a 15 minute drive north of Perth and was well attended throughout two days of beautiful weather.
According to the Forrester team at Mount Burgess Mines there were a number of themes that ran through this conference. First there was the complaint that money was not forthcoming too readily for diamond explorers operating on home territory, while those such as Tawana Resources, Crown Diamonds, Mount Burgess, Namakwa Diamonds and Reefton who were exploring and producing very successfully in Africa found funding even more difficult. The disparity in this between Canada and Australia was stark, but according to Nigel Forrester it was Pamela Strand, the president of Shear Minerals who provided a key reason. Her statistics showed that Canadian diamond explorers had found that 47 per cent of all kimberlites drilled in the Nunavut region were diamondiferous. There is a lot of difference between diamondiferous kimberlites and mineable kimberlites, but just the fact that they are diamondiferous captures the attention of investors. Also Canada now has two major mines operating at Ekati and Diavik and is now supplying a significant part of world diamond production.
Maybe the Aussies should bang the gong a bit harder about Argyle Diamonds and get a bit more promotional help from Rio Tinto. Colin Williams, the general manager gave a presentation, but there was nothing from Rio Tinto. De Beers, on the other hand had two speakers and provided drinks at the end of the Conference. It should not be overlooked also that Miles Kennedy reckons that Kimberley Diamonds will be the 5th largest diamond producer in the world from its Ellendale Fields by 2006. The simple fact that emerged from the Conference was that there was a major shortage of rough diamonds looming and exploration should be worth supporting whether it was in Australia, South Africa, Namibia or Botswana. Canadians understood the value of success as they have seen the riches that accrued to mine finders such as Chuck Fipke and Gren Thomas and their backers.
James Picton of UK stockbrokers WH Ireland illustrated his talk with a graph which showed how rough diamond prices had performed since 1949. It had not been an easy task to produce this graph as De Beers, which had all the data under its control, gave little help. What it makes clear is that the average price of rough diamonds quadrupled between 1949 and 1977, but then took off on a steady uptrend which was only interrupted around 1980/2 and 1997/2001. The graph is now moving towards the 2,250 mark from a base of 100 , so this should give potential investors food for thought. As to where the price should go now, James Picton was confident that the trend would continue, if not accelerate.
Rough prices, he said, rose on average by 20 per cent last year and he reckons that they will increase by up to 40 per cent in real terms by 2012. It is all a question of supply and demand. By 2012, he estimated, demand for rough diamonds could reach a value of US$14 billion but even after Diavik chipped in US$550 billion this would still leave a shortfall in production of US$3.5 billion. To bridge that gap would mean another 7 Diaviks coming on stream in the intervening period or as Picton put it, “the shortfall is equivalent to another De Beers.” The message from the World Diamond Conference was a simple one. “What other metal or mineral can anticipate such a disparity over the next ten years? Investors in successful diamond exploration should be on a good thing.” |
