Hello Georges
This may not be exactly what you suggested, but it is very very informative. Again, I am not sure about the formatting so I may have to ask for Mr. McDonald's help.
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An overview of 1998 diamond mining and exploration
By
Dr. Luc Rombouts
Terraconsult bvba
Oosterveldlaan 273
B-2640 Mortsel-Antwerp
BELGIUM
E-mail : rombouts@terraconsult.be
Fax : + 32 3 448 08 71
Tel : + 32 3 448 08 63
Introduction
The natural rough diamond mine supply was 120 million carats in 1998, worth US$ 6.7 billion. The amount of carats produced was the same as in 1997, but their value was down by 5% (US$ 7 billion in 1997). The drop in value was mainly due to an overall weakening of diamond prices in 1998. In volume terms, new production from Canada and Southern Africa, was offset by lower production in Congo and Angola.
Sales of rough diamonds by the Central Selling Organisation (CSO) were in 1998 US$ 3.35 billion, 28% below the previous year and the lowest level since 10 years. The CSO stockpiled during the year diamonds valued at US$ 400 million from its contractual suppliers. The CSO stockpile at the end of 1998 was valued at US$ 4.8 billion. The strict supply policy of the CSO managed to clear up US$ 1 billion worth of diamonds out of the long pipeline from mine to retailer. The diamond stocks in the trading and cutting centres are estimated at US$ 4 billion.
Retail sales of diamond jewellery worldwide were down 3% in 1998. The drop was most marked in South-East Asia, where sales dropped by 35%, and in Japan, down by 19%. On the other hand sales were up in the USA (+9%) and in Europe (+4%).
Mine production
The most important event in 1998 was the opening of the Ekati mine in the North-West-Territories of Canada. The opening of the mine is the fruition of a decade of successful diamond exploration in Canada. Ekati is a joint venture between BHP (51%), Dia Met Minerals (29%), Charles Fipke (10%) and Stuart Blussom (10%). The mine is expected to produce about 3 million carats of diamonds per year, worth close to US$ 400 million. The mine started producing diamonds in the last quarter of the year. Production in 1998 was only 250,000 carats, but by now Ekati has reached its full production rate of 250,000 carats per month. Initially diamonds were sold independently through the BHP sales office in Antwerp. In March 1999, the joint venture partners announced that 35% of the Ekati diamonds are going to be sold through the CSO.
With the expansion in the past few years at Jwaneng and Orapa, Botswana is now firmly the world's leading diamond producer. In 1998 Botswana produced 20 million carats, estimated to be worth US$ 1.6 billion. Jwaneng is the world's richest diamond mine, producing annually diamonds worth US$ 1.1 billion. A new fully automatic sorting and picking facility was installed. The expansion at Orapa is still ongoing and production should reach 12 million carats the next year. In Russia, decreasing production at the largest mine, Udachny, is being compensated by increased production from Jubilee and the newly opened underground operation at International, near Mir.
International should procuce only 200,000 carats per year, but diamonds are of excellent quality. The Russian diamond producer, Alrosa, signed in November 1998 a 3 year marketing agreement with the CSO. The amount of Russian diamonds sold through the CSO should be between a minimum of US$ 550 million per year and a maximum of 26% of total CSO sales. In South Africa, production at Marsfontein started with exceptionally high diamond grades. Marsfontein is a small rich kimberlite pipe with a grade of 2.6 carats/tonne, owned 60% by De Beers and 40% by Southern Era, the discoverers of the deposit. Southern Era lost the majority share to De Beers after a legal battle about the mining title. Controversy continues at Marsfontein now that the Government Valuator has challenged the De Beers pricing structure of the diamonds. The Government Valuator claims that the CSO offers too low prices for the Marsfontein goods. De Beers has invited the participation of a black empowerment business group (49% share of De Beers' 60% share) in the project. Reserves at Marfontein down to a depth of 150 metres would last till July 2000. Treatment of lower grade stockpile could extend the operation to October 2001. Southern Era fully owns the Klipspringer property adjoining Marsfontein. The Klipspringer project is expected to run at a production rate of 70,000 carats per year. De Beers is restructuring its older mining operations in South Africa. The new treatment plant in Kimberley should extend the life of the dump retreatment and mining operations by 15 to 25 years. Underground mining operations at Premier are going to be extended to the 1000 to 1200 m depth range, sufficient for a mine life till 2030. Transhex, who mines the alluvial deposits of the Orange River on the South Atlantic coast, merged with Ocean Diamond Mining (ODM), a small but successful offshore diamond producer. Transhex produces 180,000 carats per year, worth US$ 40 million, at the Baken mine, while ODM produces 57,000 carats per year, worth US$ 9 million, from their offshore concessions near Lüderitz in Namibia. Alexkor is mining the coastal deposits south of the Orange River at a rate of about 125,000 carats per year from onshore operations and close to 9,000 carats from offshore operations, worth close to US$ 40 million in total. The operation is state-owned and struggling. As a first step to privatisation, a management contract was awarded to Nabera Mining, a consortium led by Petra Diamonds, listed in London.
In Namibia, Namdeb, a joint venture between De Beers and the Namibian state, produced 779,000 carats onshore and 497,000 carats offshore. Namco has emerged as the country's second largest producer. In 1998, Namco produced 128,000 carats and plans to add another vessel, aiming at producing 300,000 carats per year. In the last quarter of 1998, Namco obtained US$ 132/carat for its diamonds, while in March 1999 the average selling price increased to US$ 153/carat.
In Angola, the Catoca mine managed to produce more than 1 million carats despite increased hostilities in the country. The Catoca operation near Saurimo in the east of Angola is a joint venture between Alrosa of Russia, Odebrecht of Brazil, Endiama, the state-owned diamond company of Angola, and Daumonty Financing of Holland, a company controlled by Israeli traders. Alrosa markets 90% of the Catoca diamonds at selling prices varying between US$ 75 and 100/carat. Other operators in Angola had great difficulty keeping operations going. The Yetwene mine, producing 250 carats per day and operated by DiamondWorks was the victim of an armed attack and was closed at the end of the year. Conditions in neighbouring Congo are hardly better, but MIBA (80% state-owend, 20% owned by Sibeka of Belgium) still manages to produce US$ 65 million worth of diamonds.
Most diamond production continues to come from the artisans. Congo's artisanal production was down in 1998 but still worth close to US$ 600 million. Also in Angola, production by artisans and small mining operations dwarfes the mechanized production of Catoca. Angola's total production in 1998 was down and estimated at just below US$ 700 million, with the rebel Unita movement contributing an estimated US$ 255 million. The Unita diamonds leave Angola through illicit channels via Central and West African countries.
In Australia, the Argyle mine produced 40.9 million carats. Prices for Argyle diamonds, mainly small stones of poor near-gem quality, went up by 20%. Despite the weakening in prices for most other types of diamonds, Argyle profited from the drying up of unregulated stockpile sales out of Russia and of the sharp reduction in CSO sales. The mine produced in 1998 US$ 398 million worth of diamonds. A pit expansion should extend the open pit mine life to the year 2005.
New mine developments
In the next five years, the two most important new mine developments could be the Diavik property in Canada, a joint venture between Rio Tinto (60%) and Aber Resources (40%), and Alrosa's Botyubinskaya and Nyurbinskaya kimberlites in the Marka valley, Sakha Republic, in eastern Russia. After an intensive drilling programme, which yielded high diamond grades, Alrosa is shortly starting a bulk sampling programme on the Markha valley pipes. The feasibility study on Diavik envisages mining a cluster of small, but high grade, kimberlite pipes at Lac de Gras. The kimberlite pipes to be mined initially are A-154S, A-418, A-154N and A-21. Mining is planned at a rate of 1.5 to 1.9 million tonnes per year, yielding 6 to 8 million carats, worth about US$ 400 million. If everything proceeds as planned, production should start in 2002.
In the Arkhangelsk region of northern Russia, the Lomonosova kimberlite pipes and the Grib pipe are still awaiting development. Five pipes with overall grades above 0.3 carats/tonne form the Lomonosova deposit: Lomonosov, Pionerskaya, Karpinskaya 1 and 2, and Arkhangelskaya. The five pipes are aligned over a distance of 35 Km. Five other pipes exist in the same area, but have lower grades. Overburden varies from 30 to 50 metres. The kimberlite pipes consist of an upper lower grade crater and a lower higher-grade diatreme. De Beers has joined, amidst some political controversy, the state-owned company Soglisaye to develop the Lomonosova deposit. The Grib pipe was discovered by the Verkhotina joint venture in January 1996 by drill testing a large composite magnetic anomaly. The Verkhotina joint venture was operated by the state geological survey Arkgeo and Archangel Diamond Corporation, listed in Canada. Task Holdings of the Oppenheimer family has taken up a controlling stake in Archangel Diamond Corporation. The Grib pipe occurs under 70 metres of overburden and consists of an upper crater facies, about 115 metres thick at a grade of 0.4 carats/tonne, and a richer underlying diatreme at a grade of 1.4 carats/tonne. Diamonds are valued at US$ 72/carat. A litigation between Arkgeo on the one hand and Archanchel Diamond Corporation on the other hand about transforming the exploration lease into a mining permit remains unresolved.
In Botswana, the development of the Gope kimberlite into a mine is controversial. Falconbridge and De Beers hold the property in joint venture. The Gope kimberlite is low-grade and located in the Kalahari National Park. While environmentalists and De Beers do not seem very keen, Falconbridge and the Botswana government wants the project to go ahead.
Ashton is developing three new mines: Merlin in Australia, Cempaka in Indonesia and Luzamba in Angola. Merlin, located in the Northern Territory, should produce 200,000 carats in 1999 from a cluster of small kimberlite pipes. Cempaka is an alluvial dredging operation in Kalimantan and should start in July 1999. Annual production rate at Cempaka is estimated at 35,000 carats. The Luzamba mine is a joint venture between Ashton (33.3%), Odebrecht (33.3%) and Endiama (33.3%). The mine is located along the Cuango River and trial mining produced about 100,000 carats in 1998, worth US$ 19 million. The Luzamba diamonds are sold through the CSO. Four staff members were killed by a rebel attack.
Exploration
A decade of intense exploration has led to the discovery of 200 kimberlite in the North-West-Territories of Canada. Several diamond-bearing kimberlites are at an advanced exploration stage. At Snap Lake, 220-km northeast of Yellowknife, Winspear and Aber have delineated three kimberlite dykes with good grades and excellent quality stones. The dykes are dipping at 11° to 23° and are about 2.5 metres thick. So far, resources are estimated at 1,348,000 tonnes at a grade of 1.14 carats/tonne. The average carat price of a small exploration parcel was estimated at US$ 301/carat, but the average is not robust and heavily influenced by the presence of three large stones. Winspear is now taking a larger 6000 tonnes bulk sample to firm up the grade and value estimates. Litigation is ongoing between Winspear and Aber. Winspear's share in the Snap Lake property was 67.76%, while Aber's share was 32.24%. For the year 1999, Aber and Winspear had to agree on co-funding a C$ 12 million exploration programme, proportional to their share. Aber forgot to give written notice of their agreement to participate and Winspear on strict legal terms has decided to fund the 1999 exploration programme in full and by doing so, to dilute Aber's interest to 16%. Lytton and New Indigo merged recently into the new company Tahera and are now planning to develop the Jericho property. Jericho consists of three small kimberlite pipes. The best pipe measures 1.2 hectare and has a grade of 0.93 carats/tonne, with diamonds valued at US$ 60/carat. Resources down to 300 metres depth are estimated at 5 million tonnes. The three pipes together may contain 1 million tonnes at grades varying between 0.3 and 1.0 carats/tonne. In the vicinity of Jericho, Tahera found the Contwoyto pipe, measuring 60 by 80 metres in surface area, which yielded good microdiamond results. At Kennedy Lake, the joint venture partners Monopros (60%, the Canadian subsidiary of De Beers), Mountain Province (36%) and Camphor Ventures (4%) continue to evaluate the four small kimberlite pipes Hearne, Tuzo, Tesla and pipe 5034. Total resources in these four pipes down o a depth of 300 metres are estimated at 40 million tonnes at an overall grade of 1.78 carats/tonne, valued at US$ 55/carat.
Dia Met Minerals and BHP have now identified 107 kimberlite pipes on their 30 by 30-km property. More sampling at the Pigeon pipe confirmed the earlier grade and value estimates. Pigeon has a grade of 0.45 carats/tonne, valued at US$ 54/carat. Drilling of the Koala North pipe yielded 202 tonnes of kimberlite at a grade of 0.63 carats/tonne and a value of US$ 200/carat, while drilling at Beartooth yielded 189 tonnes at a grade of 1.2 carats/tonne and US$ 79/carat. Further south, in Alberta, the Buffalo Hills kimberlites explored by Ashton have yielded poor grades. In western Greenland, the joint venture partners Monopros (51%) and Dia Met Minerals (49%) found several poor grade kimberlite dykes. A 140-kg sample of kimberlite float, aligned in a dyke-like fashion, yielded however good microdiamond results.
In Brazil, Southern Era joined Canabrava in testing several kimberlite pipes and alluvial gravels in the area about 400-km southeast of Brasilia. In November 1998, Teck pulled out of a joint venture with Canabrava. Diagem, listed in Canada, is testing the Juina gravel deposits in Mato Grosso and explores the Chapada area for possible kimberlite pipes. The Brazilian subsidiary of De Beers is now exploring for kimberlites in Venezuela and Bolivia. Overall, diamond exploration in South America is at a low level, with most activity centred on small-scale alluvial operations.
With the controversy surrounding the Arkhangelsk kimberlites, exploration for diamonds in Russia by non-Russian companies seems hardly worthwhile. In neighbouring Finland, Dia Met Minerals in joint venture with Ashton, continues to explore for better grade kimberlites.
With Congo and Angola in turmoil, the diamond exploration attention is now mainly focused on southern and western Africa. In Botswana, AfriOre and TNK are exploring the region surrounding the Gope kimberlite, while Botswana Diamondfields explores the area around the newly opened Tswapong mine. Tswapong is a small pilot-scale operation run by a joint venture between De Beers and the Botswana government.
Rio Tinto remains active in kimberlite exploration in Zimbabwe. In Namibia, Diamond Fields International (DFI) continues to sample the rich offshore deposit at Marshall Fork. DFI will be using the Coral Bay of De Beers Marine as sampling vessel. The Marshall Fork feature adjoins Namco's rich Koichab channel. In West Africa, most attention is going to Mauritania, where Rex has taken up 100,000 km² of exploration ground covering the core of the Archean Reguibat craton. Rex found for the first time in the country commercial-sized diamonds (larger than 1 mm) and is exploring for the kimberlite source rocks. Ashton and Dia Met Minerals surround Rex. Ashton has exploration permits covering 190,000 km² and has found barren kimberlites, while Dia Met Minerals started recently exploring on their 60,000-km² permits. Ashton and Dia Met Minerals have decided to pool their efforts in Mauritania into a joint venture.
1998 production table
Worldwide production
Country Mines Tonnes Carats US$/ct US$ Operator
('000) ('000) ('000)
South Africa Venetia 3,326 4,495 90 404,550 De Beers
Premier 3,058 1,392 80 111,360 De Beers
Koffiefontein 2,302 158 160 25,280 De Beers
Kimberley 4,170 683 120 81,960 De Beers
Namaqualand 6,069 768 180 138,240 De Beers
Finsch 3,969 2,165 55 119,075 De Beers
Marsfontein 116 532 150 79,800 De Beers/Southern Era
Klipspringer 50 35 120 4,200 Southern Era
Bellsbank-Ardo 240 36 220 7,920 Rex
Baken 4,750 180 220 39,600 Transhex
Alexco 1,200 130 260 33,800 State to be privatised
Benco 60 25 140 3,500 Benguela Concessions
Others 300 50 175 8,750 Various
Total South Africa 29,610 10,649 99 1,058,035
Botswana Orapa 8,389 6,300 55 346,500 Debswana (De Beers)
Lethlakane 3,419 785 110 86,350 Debswana (De Beers)
Jwaneng 9,266 12,688 90 1,141,920 Debswana (De Beers)
Tswapong 149 25 75 1,875 De Beers/Botswana
Total Botswana 21,223 19,798 80 1,576,645
Namibia De Beers Marine 2,000 497 220 109,340 Namdeb (De Beers)
Namco 150 128 145 18,560 Namco
ODM 90 57 150 8,550 ODM
Namdeb contractors 1,050 73 325 23,725
Namdeb onshore 25,862 705 325 229,125 Namdeb (De Beers)
Total Namibia 29,152 1,460 267 389,300
Angola
Catoca 1,700 1,020 68 69,360 Alrosa/Odebrecht/Endiama
Luo 375 75 200 15,000 DiamondWorks
Luzamba 500 100 190 19,000 Ashton/Odebrecht/Endiama
Smaller mines 900 200 180 36,000 Endiama+various
Artisans various 1,200 248 298,000 Various
UNITA artisans various 2,500 102 255,000 Various
Total Angola 5,095 136 692,360
D.R. Congo
Mbuyi-Maji 5,000 6,500 10 65,000 MIBA
Artisans various 14,862 40 595,800 Various
Total D.R.Congo 21,362 31 660,800
Tanzania
Williamson 1,384 93 150 13,950 De Beers/Tanzania state
Central African Rep. Artisans 550 211 116,050 Various
Ghana Mainly artisans 525 23 12,075 Various
Ivory Coast Artisans 166 136 22,600 Various
Liberia Artisans 256 105 26,820 Various
Sierra Leone Artisans 900 140 126,000 Various
Guinea Small operators+artisans 596 195 115,922 Various
Lesotho Small operators+artisans 53 367 19,290 Various
Brazil Small operators+artisans 1,400 46 116,050 Various
Venezuela Small operators+artisans 350 128 44,800 Various
Guyana Small operators+artisans 15 80 1,200 Various
China Small operators+artisans 150 90 13,500 Various
Indonesia
Cempaka 3,750 35 190 6,650 Ashton
Australia
Argyle 17,000 40,900 10 398,000 Rio Tinto / Ashton
Merlin 55 20 80 1,600 Ashton
Total Australia 17,055 40,920 10 399,600
Canada
Ekati 250 250 130 32,500 BHP / Dia Met
Russia
Udachnaya 8,000 10,200 95 969,000 Alrosa
Jubilee 7,000 4,200 60 252,000 Alrosa
Others 1,000 700 90 63,000 Alrosa-other state enterprises
Total Russia 16,000 15,100 85 1,284,000
World total 119,723 56 6,728,147
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Rex Diamond Mining Corporation Ltd.
The Genesis of the Diamond (by Dr. Luc Rombouts)
This page was written by Dr. Luc Rombouts
We will provide you with information on a regular basis
Diamond is the high pressure variety of carbon. Laboratory studies have shown that diamond crystallises out from liquid carbon at pressures of a least 50 kilobar (50,000 times the atmospheric pressure) and at temperatures above 900 °C. At lower pressures or temperatures, graphite is formed instead of diamond. At higher temperatures, above 1,200 °C, graphite forms again. At pressures of about 50 kbar, diamond formation is limited to a temperature window of 900 °C to 1,200 °C.
Pressures of 50 kbar are encountered at depths of 150 km or more in the earth. Usually at these depths, temperatures exceed 1,200 °C, except underneath the old stable Archean cratons, where temperatures are in the range of 900 °C to 1,200 °C at 150 to 200 km depth. These old cratons were formed more than 2.5 billion years ago and have since then been unaffected by a major tectonic event. They form the nuclei of the old continents. Examples are the Slave craton in Canada, the Siberian craton in Russia, the Kalahari craton in Southern Africa, the Kasai craton in Angola and Congo-Zaire, and the West African craton. Diamonds have been formed underneath these cratons for billions of years. Sudden, deep-seated volcanic eruptions can bring the diamond from depths of 150 to 200 km to the surface. Such deep volcanoes in the cratons are rare and hardly known today. They existed, however, at several episodes in the past. These deep-seated volcanoes are called kimberlites or lamproites, depending on their mineralogical and chemical composition.
Kimberlites erupted 1,100 million years ago (e.g. Premier, Argyle, Mali, India), 520 million years ago (Venetia, Russia), 250 to 90 million years ago (most African kimberlites), 50 million years ago (Lac de Gras, Tanzania) and 20 million years ago (Ellendale in Western Australia). The kimberlite magma comes to the surface in a few hours time, following deep fractures in the earth, known as fissures. When the magma cools, the kimberlite forms "dykes", i.e. walls, in the deep fractures. A few kilometres from the surface, the confining pressure of the overlying rocks is no longer sufficient to contain the gas-rich kimberlite magma and a violent eruption follows. This eruption creates a carrot-shaped explosion pipe (diatreme) topped by a crater of pulverized rock pieces that after being ejected into the air fell back into the explosion pipe, forming layered tuffs.
The diatreme and crater are a mixture of kimberlite and pulverized country rocks, containing minute amounts of diamonds that were brought to the surface by the kimberlite magma (at best the order of 1 carat or 0.2 g per tonne of rock). Once the kimberlite volcano is emplaced in the landscape, erosion by rain, wind and rivers starts, and over millions of years the volcano is broken down to its root level. If erosion continues, the entire volcano disappears and only the kimberlite dykes, solidified at depths greater than a few kilometres at the time of emplacement, remain. The relatively young Lac de Gras and Tanzanian kimberlites (only 50 million years old) usually still have a large part of the crater with tuff layers preserved. More erosion, such as in the Kimberley pipes in South Africa, can remove the crater, and the kimberlites are exposed at the diatreme or explosion pipe level.
Deep mining since the last century has removed most of the diatreme in Kimberley and the root of the kimberlite explosion has now been reached, with dykes becoming more abundant. In the Bellsbank area, erosion was more intense, and the kimberlite diatreme was entirely removed, with only kimberlite dykes remaining.
Not all kimberlites are diamond-bearing though. Often the kimberlite magma takes too long to come to the surface. Diamonds tend to turn into graphite or burn into carbon dioxide if the magma stays too long at shallow depths where pressures and temperatures are too low to keep diamonds stable. On average, about 1% contain diamonds in economic quantities. Diamond-bearing kimberlites with grades better than 0.1 carat/tonne are extremely rare. Presently about 30 major kimberlites are being mined world-wide.
Diamonds are very rare crystals that are continuously being depleted. Finding new diamond-bearing kimberlites is a major technological challenge, as most easily discovered pipes have been found already. With ever increasing demand for diamonds, a serious shortfall of supply is expected to develop after the year 2000.
The erosion of the kimberlites frees the diamonds, along with other minerals formed at great depths and brought to the surface by the kimberlite magma from the kimberlite rock, then dispersing them in the rivers. Minerals formed together with diamonds at depths of 150 to 200 km are for instance pyrope garnets, ilmenites, chrome-diopsides and chromites. These minerals are more abundant than diamonds and are therefore more easily detected in samples taken in the rivers downstream of the pipes. For this reason, they are called kimberlite indicator minerals and are an important exploration tool. Apart from sampling for indicator minerals in the rivers, other exploration techniques applied to kimberlites are magnetic surveys. The earth tends to be more iron-rich at greater depths and the deep magma brought to the surface by kimberlites is often richer in magnetic iron-bearing minerals than the rocks at the surface. As a result, the kimberlites often are more magnetic than the surrounding rocks. These magnetic anomalies can be detected by measuring systematically the magnetic field along survey lines from the air (by aeroplane or helicopter) or on the ground.
Because of their higher density than sand, diamonds tend to settle in the bottom gravels of river deposits. If their concentration to those bottom gravels is high enough (say 1 carat per ten cubic metres), they can constitute economic alluvial diamond deposits.
The diamonds are eventually carried by the rivers to the sea, where they can accumulate in beach deposits (e.g. Namaqualand and Namibia). During transport in the rivers, only the best diamonds with little or no imperfections or cleavages survive the continuing wear and tear over millions of years. Therefore, diamonds in river or beach deposits tend to have a better average quality than the diamonds in the original source rocks (the kimberlites). The alluvial and beach deposits are easily mined and reserves have been seriously depleted this century. Mainly lower grade or deeper offshore deposits remain. With diamonds continuously being depleted at a rate of more than 100 million carats per year, around US$400 million is now spent annually by mining and exploration companies on their world-wide diamond exploration efforts.
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The suggested economics of aluvial mining at the rate of .1c/M3 I thought was interesting as it gives us a rule of thumb in evaluating the numbers we see coming out of Brazil.
Regards |
