Content maintained by Keith Porritt
Diamond |
AIMR 2008 |
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 of any known material at room temperature. Diamonds form 150-200 km below the Earth's surface at high temperatures (1,050°C-1,200°C) and pressures (45-55 kilobars). They are carried to the surface within kimberlite and lamproites which intrude through the earth's crust. These intrusions form narrow cylindrical bodies called pipes and only a very small proportion have significant diamond content. When pipes are eroded liberated diamonds can accumulate in alluvial deposits and may be found far from their source as their hardness allows them to survive multiple episodes of erosion and deposition. The quality of diamonds is subdivided into gem, near gem and industrial categories. In rare cases up to 90% of diamonds in a deposit are of gem quality, but most economic deposits contain 20% to 40% gem quality diamonds. Current uses for diamond include jewellery, mining and exploration, stone cutting and polishing, computer chip manufacture, machinery manufacture, construction and transportation services. A large proportion of industrial diamond is manufactured and it is possible to produce synthetic diamonds of gem quality.
Resources
EDR for gem/near gem was 97.3 Mc and industrial 101.3 Mc, both down 11% compared with 2006 due to lower production at the Argyle mine in WA.
Accessible EDR
All diamond EDR is accessible for mining.
JORC Reserves
JORC Code reserves account for almost all 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.
Exploration
ABS data indicate that expenditure on exploration for diamond in Australia in 2007 was $18 million, down 34% on 2006. Exploration continues to be concentrated in WA, notably the Kimberley region, and in the NT.
Production
Australia produced 19.2 Mc of diamond in 2007, 10.1 Mc less than in 2006. Australia ranks as the world's fourth largest producer of diamond by weight after Russia, Botswana and Congo. As a producer of gem/near gem diamond, Australia is the fourth largest after Russia, Botswana and Canada, and is the third largest producer of industrial grade diamond after Congo and Russia.
Production was almost entirely from Rio Tinto Ltd's Argyle mine, which produced 18.7 Mc making it the leading global producer. Argyle production is mostly industrial and cheap diamonds with an average price of US$15-16 per c. Due to lower grades, production was 36% less than in 2006 despite a 2% increase in the volume of ore treated. Production is expected to remain at about 60% of Argyle's historical annual average of 34 Mc as the open pit winds down and underground production ramps up.
Production from the Ellendale mine in the West Kimberley region increased to 475,735 c in 2007, up from 213,000 c in the previous year. The average grade was around 8c per hundred tonnes. The average sale price for 2007 was over US$135 per c ranging up to US$216 per c for parcels tendered late in the year. Ellendale is noted for high-value fancy yellow gem diamonds.
World Ranking
Australia's EDR of industrial diamond ranks third with 17% of current world total EDR after the Democratic Republic of the Congo (Kinshasa) with 25% and Botswana with 22%. Detailed data are not available on world resources of gem/near gem diamond, but Australian stocks are among the largest for this category.
Industry Developments
Argyle (WA): Rio Tinto Ltd approved the development of an underground block cave mine under the AK1 open pit in late 2005. It also approved an open pit cutback on the Northern Bowl to facilitate the transition from open pit to underground mining. The underground operations are expected to extend the life of the mine to about 2018. The cost estimate for the project has been revised to US$1.5 billion, up from US$910 million, due to cost increases in the Australian mining and construction industry and challenging ground conditions. The underground development consisting of 34 km of tunnels and excavations was 40% complete by the end of 2007. Construction of the major underground infrastructure commenced in February 2008. Production from Argyle's AK1 open pit mine is to continue through 2008 with initial underground production expected in 2009 when the mine will transition to an underground operation. Full production from the underground operation is on schedule to be achieved by December 2010.
Ellendale (WA): In November 2007, London-based resource firm Gem Diamonds Ltd acquired a controlling interest in Kimberley Diamond Company, the Australian company which developed and owned the Ellendale Mine. The total cost of the takeover was US$249 million cash. Gem Diamonds reported that what had been a marginal operation and a loss-making business is being turned to profit through access to capital to progress modifications to the processing plants and to optimise sales processes. The company expects the mine will process 8.5 Mt to produce almost 600,000 c in 2008 with improved sales techniques to capture downstream margins. Further increases to the design capacity are underway and in 2009, Ellendale is expected to process 10.5 Mt.
Merlin (NT): North Australian Diamonds Limited is evaluating a potential mining project which could produce 400,000 c per year based on the higher grade central and southern pipe clusters. To confirm resources to underpin this 10 year plus operation, the company is undertaking a drilling program to increase the known resource by around 30% to 15 Mt containing approximately 5 Mc.
