About those posted figures re. the distribution of economic diamond pipes, here's some discussion from Marum president Richard Boulay--
[interesting reading!]
====================================================
Hello Jesse,
Thanks for your question about the distribution of economic diamond pipes. I'm still learning, so consider my opinion with suitable skepticism. You pointed out a message on the Marum thread. It dealt with the generally acknowledged rarity of economic diamond pipes as a proportion of total pipes and referred to the statistical table reproduced below.
Quote
Area/Total pipes/diamondiferous ones/Economic ones
Yakutia 300/29/9
Arkhangel 200/26/5
South Africa 500/50/15
Botswana 100/8/3
Tanzania 400/5/1
Unquote
This reads that, for instance, Tanzania had 400 discovered kimberlite pipes, of which 5 are diamondiferous and only one is economic.
I have seen this notion expressed in various forms many times during the past several years. Generalizations are often wrong and they are almost always misleading. However, a generalization can be made to be true if you constrain one or more of the conditions. For example, the number of economic pipes in the table is probably accurate if you constrain the definition of economic to something like this... "economic in the sense that production from that pipe, allowing for corporate debt, international marketing and international corporate overhead would still generate sufficient earnings to noticeably impact the earnings statement of a giant international mining, exploration and marketing corporation". In other words, using an oil industry analogy, the economic pipe definition above is accurate if the definition of "economic" is perhaps restricted to billion barrel plus oilfields. Smaller oilfields, including all of the western Canadian oilfields (except for the oilsands) would have to be classified as non-economic if we carried this analogy along. Of course, this is nonsense.
The classification of a pipe as diamondiferous is also subject to arbitrary definition of sampling procedures and samples sizes. Without going into detail, my impression is that the numbers in the table also reflect the narrow internal definitions of one or two global scale companies.
Referring to the Tanzanian example again, the one producing pipe is the Mwadui mine, formerly known as the Williamson mine and named after its discoverer Williamson who worked in the area during the 1930's. I believe its surface area is the largest of any diamond mine ever mined. Apparently, according to the table above there are also five diamondiferous pipes. That's strange, because I have observed artisanal (i.e. "Mom and Pop" scale) diamond mining operations in Tanzania north and west of the Mwadui mine area. My guess is that there are probably several hundred of these, each on a different pipe. Also, I have spoken, on social occasions, to "buyers" who specialize in travelling around and purchasing rough (i.e. raw diamonds) on the spot and then take them either to Dar es Salaam and then offshore, or to Mwanza and then across Lake Victoria to Kenya or Uganda. These buyers also work the artisanal gold operations of the greenstone belts between the Mwadui area and Lake Victoria. Some of the buyers are lone operators, some work for major companies and some are lone operators who then sell to major company "buyers". This diamond production, significant because it mainly involves valuable stones which are discreetly transportable by individuals, is then attributed, to the extent that it is attributed at all, to other mining operations in other countries. The scale of these operation worldwide is an important part of the diamond supply side of the industry.
Because of the infrastructure hurdle and the difficulty in developing advance reserves on a small operation in a place like Tanzania, many diamondiferous pipes will never be developed as small industrial mines. But, the artisans can work them using traditional methods. My guess is that if the Tanzanian pipes were located in, say, Nevada, there would be several medium-size mines, five to ten smaller ones, and over a hundred fully mechanized Mom and Pop operations.
There is another completely different set of factors that suggest that the generalizations proposed in the diamond pipe table reproduced above are misleading. Namely, the fact that information is selectively disclosed by the industry. This is not necessarily deliberate but simply a fact that the industry has been dominated by a small number of companies for most of this century. If a large international diamond producer with mines in several countries and a good presence in, say, Botswana, is planning its operations within a, say, 30 year demand projection, that company might allocate some future production from a pipe which is now in the 100 "barren" pipes or classified in the 8 "diamondiferous but uneconomic" class in the table above. The diamond mining industry is secretive for good and valid commercial reasons.
I guess the lessons here, if there are any, are that generalizations should never be accepted at face value, that investors should be always suspicious and diligent, that information is always deficient and misleading and, finally, that things are never as simple as we want them to be. That concludes my diamond commentary for today.
You can post this if you wish, providing you attribute it to me
Regards, Rick Boulay
====================================================
Wow-- a big thanks to Rick Boulay-- He's always informative!
Cheers,
-j
:> |
