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Diamond miners encouraged by new sources of high-end stones

September 17, 2017 2:32 PM
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Diamond miners encouraged by new sources of high-end stones

Drought of large diamonds ends in Lesotho, as Canadian firms ponders developing fancy yellow mines, and Namibia’s offshore searches now paying off

For years Letseng was the only mine in the tiny southern African kingdom of Lesotho, where yield is low but stones are large and of incredible quality.

Due to the tough terrain – the whole country is above 1,000 metres and Letseng is the world’s highest mine at an altitude of 3,100m – mining firms have been reluctant to venture there. But as the government seeks to boost its economy through diamond production, four new mines were announced last year.

Since April, the country has produced five exceptional stones, including two yellow diamonds – the smallest an 80ct, D-colour Type II and the largest a 126ct, D-colour Type IIa. Type IIa diamonds are the purest and most expensive due to their great transparency owing to the absence of nitrogen molecules that cause yellow or brown tints. They form only 1 to 2 per cent of all uncovered diamonds and command a 5 to 15 per cent premium.

These finds allayed fears of a drought of large stones after Letseng’s boom in 2015, when three diamonds, each of about 300 carats were found in a year.

Lebohang Thotanyana, Lesotho’s mining minister, told Mining Weekly last year the country aimed to be a leading diamond producer and was improving its legal framework to meet international standards in environmental protection and health and safety to ensure the long-term sustainability of the industry. “We want to increase Lesotho’s diamond production from its current 350,000 carats per year to about 1.5 million carats a year over the next two years,” he said.

Meanwhile, Canada, one of the world’s largest producers of white diamonds, is showing signs of also producing fancy yellow and orange diamonds.

Canadian exploration firm North Arrow Minerals is reassessing its Naujaat project, which sits on the largest diamondiferous kimberlite pipe in the eastern Canadian Arctic.

The company’s initial mini-bulk sample, from 2014 to 2015, showed disappointing results in diamond carat, and its attention in the project waned until the diamonds were polished. Then the stones were awarded “fancy vivid” – the most desirable grade for coloured diamonds – making the company rethink the value of developing the area.

Last June, North Arrow announced a C$3.2 million (HK$20.7 million) drilling programme in the highest grade phase of the deposit to better understand diamond distribution and characteristics in Naujaat. It hopes to improve confidence in diamond values, and a larger bulk sample is planned for 2018.

Canada has already started producing large yellow diamonds. Last October, the Dominion Diamond Corporation discovered the Arctic Sun in its Ekati mine – a 65.93ct rough that was later turned into a rare emerald-cut fancy vivid-yellow diamond of 30.54ct. Emerald cuts are unusual for coloured stones as they allow the colour to leak, but cutters decided that the rough stone was intensely coloured enough that it wouldn’t make much of a difference.

Interest in coloured diamonds remains high, if April’s record-breaking US$71.2 million sale of the 59.6ct Pink Starby Sotheby’s Hong Kong is anything to go by. Should North Arrow be successful, this discovery could be a boon for the global yellow diamond supply, has been low since the closure of the Ellendale mine in Australia, in 2015. This mine accounted for 50 per cent of the world’s fancy yellow diamonds and sold the exclusive rights to them to Tiffany & Co, which saw major demand just as the mine’s supply was running out.

As most of the existing mines across the world will soon be exhausted of their supply, the ocean presents the new frontier for diamonds.

In June, the SS Nujoma, the world’s most advanced diamond exploration and sampling vessel, was launched by Debmarine, a partnership company between Namibia’s government and De Beers. The US$157 million “floating mine” sucks up tonnes of sediment from the ocean floor every hour, then crushes it and stores any diamonds. The diamonds are then airlifted by helicopter and sorted on land.

Despite acquiring the right to mine off the Namibian coast in 1991, progress was slow because of the cost and difficulty of developing the right technology. Just 3 per cent of the 7,770 square kilometres of sea floor it is allowed to mine has been explored so far. The potential for offshore mining has long been known; a 1991 Gemological Institute of America report said Africa’s southwestern coast was believed to hold at least 100 times as many diamonds by weight as those used in jewellery each year.

These new efforts seem to have paid off as the diamonds have reportedly been of great quality, with a clarity exceeding those mined on land. Last year Debmarine produced about 1.2 million carats. The value of offshore diamonds is only about 13 per cent of De Beers’ onshore gems, but they fetch the highest prices out of its seven mines, The Telegraph reported last year.

However, environmentalists are worried about the potential damage caused by the mining. Emily Jeffers, a lawyer at the US non-profit organisation, Center for Biological Diversity, told The Washington Post little is known about the deep sea and mining could cause irreparable harm before new environments and species are discovered.

Debmarine employs ecologists to ensure mined areas recover, but admits it can take up to 15 years. Jan Nel, Debmarine’s head of operations, told the Telegraph: “We are only influencing about 200 metres around the area we mine. This is not a fish breeding ground. It’s a minor impact compared to jobs created and what it does for the country ... but does have an environmental impact.”


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