Diamond

AIMR 2013
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Diamond

Diamond is composed of carbon and is the hardest known natural substance, although it can be shattered with a sharp blow. It also has the highest thermal conductivity at room temperature of any known material. Diamonds form 150 to 200 kilometres below the Earth’s surface at high temperatures (between 1050°C and 1200°C) and pressures (from 45 to 55 kilobars). They are carried to the surface within kimberlite and lamproite magmas which intrude through the Earth’s crust. These intrusions generally form narrow cylindrical bodies called pipes, but only a very small proportion have significant diamond content. When the pipes are eroded, liberated diamonds can accumulate in alluvial deposits and may be found far from their source. This is because their hardness allows them to survive multiples episodes of erosion and deposition.

Current uses for diamond include jewellery, mining and resource exploration, stone cutting and polishing, computer chip manufacturing, machinery manufacturing, construction and transportation services. A large proportion of industrial diamond is manufactured and it is possible to produce synthetic diamonds of gem quality.
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Resources

In the past, natural diamond quality was subdivided into gem, near-gem and industrial categories, however recent developments within the diamond industry has resulted in almost all natural diamonds being used for jewellery. The United States Geological Survey (USGS) reports that only 3% of industrial diamonds are non-synthetic. As a result, only total carats are reported here.

Australia’s Economic Demonstrated Resources (EDR) of total diamond resources decreased by 2% in 2012 to 268 million carats (Mc).
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Accessible EDR

All diamond EDR is accessible for mining.

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JORC Reserves

The Joint Ore Reserve Committee (JORC) Code Reserves account for 55% of Accessible Economic Demonstrated Resources (AEDR). The remaining AEDR comprise those Measured and Indicated Resources reported by mining companies, which Geoscience Australia has assessed as being economic in the long term.

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Production

Australia produced 8.6 Mc of diamond in 2012, 1.1 Mc more than in 2011. Production during 2012 was almost entirely from Rio Tinto Limited’s Argyle mine, which produced 8.5 Mc. Production at Australia’s two currently operating diamond mines, Argyle and Ellendale, both increased in 2012.

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World Ranking

As a result of the changes in the reporting of Australia’s diamonds described above, it is not possible to compare Australia’s EDR for diamonds with the rest of the world based on USGS figures. In terms of overall production, Australia ranks as the world’s sixth largest producer of diamonds by weight, up from seventh largest in 2011.

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Industry Developments

Argyle (WA): Production continued at Rio Tinto’s Argyle open-cut operation in 2012, yielding 8.5 Mc of diamonds, including valuable rare pink diamonds. Production figures for 2012 were higher than for 2011 when the company’s open-cut operation yielded 7.4 Mc. In March 2012, Rio Tinto announced that it had commenced a strategic review into its diamond business, including exploring options for divestment of its diamond interests. Following the review, it was announced in June 2013 that Rio Tinto would retain its diamond businesses. In April 2013, Rio Tinto officially opened the Argyle underground mine. Production from Argyle is expected to transition from open-pit to underground mining by 2015. Development of the underground operation is expected to extend the life of the mine until at least 2020.

Ellendale (WA): Production at Ellendale in 2012 took place from the E9 pipe, with the E4 pipe remaining on care and maintenance. A total of 0.16 Mc was produced, representing an increase from 0.12 Mc in 2011. During 2012, diamonds produced from Ellendale achieved an average price of US$720 per carat. The Ellendale mine produces rare fancy yellow diamonds which achieved an average price of US$4393 per carat in 2012 and contributed 78% of revenue. The Ellendale diamond mine was acquired by Goodrich Resources Limited (now Kimberley Diamonds Limited) in December 2012. Kimberley Diamonds has begun an extensive exploration program at Ellendale aimed at increasing the life of mine, with the E4 Satellite and E6 pipes prioritised for exploration.

Venus Smoke Creek (WA): Venus Metals Corporation Limited undertook a bulk sampling program during 2012 following an announcement in 2011 of an initial Inferred Resource of 6 Mc, which was based on historical exploration data. The bulk sampling program yielded 552 diamonds for a total of 39.72 carats, with a highest nominal grade of 3.22 carats per hundred tonnes. These results were below expectations and prompted an independent audit to assess the suitability of the modular diamond-processing plant and investigate possible reasons for diamond losses during processing. Some modifications to the diamond-processing plant were suggested to improve efficiency and diamond recovery. Further bulk sampling is planned for the future.

Webb (WA): Meteoric Resources NL, in joint venture with GeoCrystal Limited, has identified more than 80 magnetic anomalies in the Arunta Region of WA with characteristics similar to known kimberlite and lamproite bodies. Seven of these targets were drilled in June 2013, of which five holes intersected weathered olivine-bearing ultramafic volcanic rocks with geochemical and petrographic characteristics consistent with kimberlite magmas. A number of diamond indicator minerals were recovered, although, at this stage, no diamonds have been recorded. Additional drilling of a further 15 to 20 magnetic anomalies commenced in September 2013. Regional sampling of surface material for diamond indicator minerals is also planned.

Merlin (NT): Exploration at Merlin continued throughout 2012 and into 2013, with the focus on drilling, geophysical surveys and stream gravel sampling. In September 2013, Merlin Diamonds Limited announced that it had begun trial mining at Merlin. Trial mining took place for approximately one month using hydraulic borehole mining techniques. Follow-up investigation is focussed on engineering work aimed at increasing the rate of production. A processing plant was commissioned at Merlin also, and achieved a capacity of 75 tonnes per hour.

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