Currently, diamond deposits discovered in the middle of last century make up the overwhelming majority of the global production. The depletion of their reserves for open-pit mining explains the transition to underground mining, which significantly increases the cost of rough diamonds and can lead to suspending or even shutting down a mining enterprise when the diamond market’s activity is low. However, in most cases, going underground is the only option for diamond mining companies to continue their activities, and they are willing to invest heavily in the construction of underground mines. This is due to the fact that over the past 2-3 decades, only a few large diamond deposits have been discovered, and those cases were quite unique. There are just several projects in the world for the development of new diamond deposits, some of which have already been put into operation but have not yet reached their full design capacity.
Let’s take a closer look at these projects in several countries, as well as mothballed diamond mines, the production at which can theoretically be restored in the foreseeable future.
Canada
In Canada, the large Star - Orion South project is under construction on the Fort à la Corne kimberlite field in the province of Saskatchewan. Star Diamond Corporation began exploration back in the 1990s. The work was carried out with varying success and was even suspended for several years after the global financial and economic crisis. In 2015, the company completed the project's mineral resource estimate. In 2017, Star Diamond entered into an agreement with Rio Tinto Exploration Canada Inc. (RTEC), which allowed the latter to have an option to receive up to 60% (and later on, up to 75%) of the shares in the project. In 2018, the company announced the independent Preliminary Economic Assessment, according to which the deposit that included two kimberlite bodies (Star and Orion South), could produce 66 mn carats of diamonds by open-pit mining within 38 years (including 4 years of stripping and preliminary development work), that is, about 1.9 mn carats per year. The average cost of rough diamonds from the Star and Orion South kimberlites was estimated at $190 per carat. In November 2023, Star Diamond and RTEC entered into an agreement for acquiring the RTEC’s 75%-share in the project by Star Diamond; the transaction is expected to be completed by the end of March 2024. Early in 2023, Star Diamond announced that it plans to begin the revision process of the project’s mineral resource estimate and preliminary economic assessment in 2024. The scheduled date to start the construction of the mine and the commissioning of the deposit has not yet been announced.
De Beers Canada acquired the rights to the Chidliak project in Nunavut in 2018 by purchasing Peregrine Diamonds Ltd. that had owned the project since 2008. The project is a 60x80 km kimberlite field where 71 kimberlite bodies have been identified. In 2019, De Beers Canada identified 35 kimberlite bodies as priority ones for further study. In two of them (pipes CH-6 and CH-7), inferred resources were estimated at 22 mn carats of diamonds with an average ore grade of 1.8 carats per ton of ore.
In Nunavut, there is another potential source of diamonds - the mothballed Jericho mine. The mine operated from 2006 to 2008. During this period, Tahera Diamond Corp., the owner of the mine, produced about 700 thousand carats of diamonds. Taking into account the company’s initial plans (disrupted by the 2008-2009 crisis) to receive 500 thousand carats annually for eight years, it can be assumed that the remaining reserves of the deposit are about 3.3 mn carats. In 2010, Tahera sold the Jericho mine to Shear Diamonds Ltd., which began to restore it and even raised financing, but it faced a decline in demand for rough diamonds in 2012 and ceased operations. The mine is currently not operational.
If the diamond market conditions improve, production may also resume at the Renard mine located in the province of Quebec and owned by Stornoway Diamonds. The deposit was put into operation in mid-2016. In 2018, 1.3 mn carats of diamonds were recovered, and in 2019 - about 1.8 mn carats. The company’s plans were to produce an average of 1.6 mn carats annually for 14 years. Stornoway made its decision to suspend the operation at the mine and put it into care and maintenance in March 2020, amid the COVID-19 pandemic.
Angola
In late 2023, the first large diamond mine in a long time was officially launched in Angola. The Luele kimberlite pipe in the Luaxe concession area (the original name of the project) is located not far from the famous Catoca pipe. The deposit was discovered in 2013. According to the latest data, its diamond resources are estimated at 628 mn carats, and the expected mine life is 60 years. The plans were to obtain about 5.7 mn carats of diamonds from the Luele kimberlites in 2023. It is expected that after the project reaches full design capacity, its production volume can increase to 8 mn carats per year.
As of 2022, Sociedade Mineira de Catoca Lda (50.5%), Endiama (13%), ALROSA (13%), and four Angolan companies (23.5%) were the owners of the project. According to the new 2023 data, the owners include Sociedade Mineira de Catoca Lda (50.5%), Endiama (25%), Falcan (19.5%), unnamed pension fund (4%), and the Geological Institute of Angola (1 %). These changes in ownership, as well as the change in the name of the project, are likely related to the sanctions imposed on Russian diamond miner ALROSA.
There is an undeveloped kimberlite deposit in the country, the Camafuca Camazambo pipe, discovered back in 1952. As of 2000, its inferred resources were estimated at 23.25 mn carats by SouthernEra to a depth of 145 m. Currently, the Endiama company that owns the field is looking for an investor to develop it.
In addition, prospecting and geological exploration activities are underway in Angola aimed at identifying new primary diamond deposits. In particular, Australia’s Lucapa Diamonds, jointly with Angola’s Endiama and Rosas & Petalas, is searching for primary diamond deposits at the Lulo area where they are currently developing diamond-bearing placers. As a result of this work, 132 kimberlite bodies were discovered and the diamond potential of 14 of them was confirmed as of 2023.
In 2021-2022, Rio Tinto and De Beers returned to the country to carry out the geological exploration for primary diamond deposits. Rio Tinto begins working on the Chiri project, and De Beers - on two licensed areas in the north-east of the country. Both companies operate jointly with the Angolan state-owned Endiama.
Botswana
Botswana Diamonds (incorporated in Ireland) holds three exploration licenses in Botswana’s Kalahari region, including the KX-36 project area. The company acquired the rights to these concessions in 2020 through the acquisition of Sekaka, the exploration division of Petra Diamonds. Indicated resources of the KX-36 kimberlite pipe estimated in 2016 amounted to 17.9 mn carats, and inferred resources were estimated at 6.7 mn carats. The average cost of stones at that time ranged from $65 per carat to $97-$107 per carat.
The mothballed underground diamond mine Ghaghoo (former Gope) owned by the British Gem Diamonds company is also located in the Kalahari region. The mine was put into care and maintenance back in 2017 due to declining diamond prices. Since then, Gem Diamonds has considered various options, including selling the asset, and made its final decision in the spring of 2023 to shut down the mine. As of early 2014, the indicated and inferred resources of diamonds from the Ghaghoo deposit amounted to 20.53 mn carats. During 2015 to 2017, about 140 thousand carats were mined totally, that is, remaining resources exceed 20 mn carats.
South Africa
In South Africa, the Canadian-listed Diamcor Mining company plans to focus in 2024 on the implementation of its Krone-Endora residual-alluvial project located near the De Beers’ Venetia mine. Inferred resources of placer diamonds are estimated at 1.38 mn carats.
Botswana Diamonds’s intention is to start mining diamonds from the Thorny River primary kimberlite deposit in 2024. The ore resources (without specifying their category) of the deposit are estimated at 1.2 mn to 2.1 mn tons of ore with an average diamond grade of 0.46 to 0.74 carats per ton. The average price of diamonds is estimated at $120 to $220 per carat. Botswana Diamonds will be able to start operation immediately after receiving permits from the South African government.
Rest of Africa
In Sierra Leone, the Australia-based Newfield Resources plans to significantly increase the diamond production at its Tongo underground mine, the first diamonds from which were recovered in 2020. 7,800 carats of diamonds were mined at the deposit in 2022, and the diamond production doubled in 2023. In 2026, the company expects to produce 200 thousand carats annually, and 300 thousand carats are expected to be mined each year from 2028. Relatively small mining volumes are offset by the high quality of the gemstones, and the average price of rough diamonds sold in 2022 was $262 per carat. The deposit is a cluster of 11 kimberlite dykes, two of which are currently under development. Indicated and inferred resources of diamonds from five dykes were estimated at 8.3 mn carats. In the future, Newfield Resources is going to continue geological exploration in the Tongo area to increase diamond resources.
In Zimbabwe, ALROSA jointly with the Zimbabwe Consolidated Diamond Company (ZCDC) conducts geological exploration under the Malipati project in the provinces of Matabeleland South and Masvingo. The Malipati kimberlites are believed to contain high-quality Type II A diamonds, but the detailed information on the project is not publicly available.
Australia
From 2021, Australia is no longer among the major diamond-mining countries after the closure of the Argyle mine on the olivine lamproite pipe of the same name in November 2020. In addition to being one of the largest (in some years, the world's largest) diamond mines, the Argyle mine was also a source of rare fancy pink diamonds. Several small diamond projects are currently under implementation in the country.
Gibb River Diamonds holds an exploration and mining license for an area that includes the Ellendale deposit in Western Australia. The deposit was operated from 2006 to 2015 (during this time, about 1.3 mn carats of diamonds were recovered) and was an important source of fancy yellow diamonds. In the fall of 2023, Gibb River announced the assessment of inferred resources for one of the deposit’s tailings (E9 Main Lights stockpile); they amounted to 5.2 mn tons of ore with an average diamond grade of 0.0126 carats per ton (66.2 thousand carats).
Lucapa Diamonds is working on the Merlin project in the Northern Territory. However, in November 2023 the company announced the suspension of its feasibility study. Lucapa decided to consider options with lower production and capital costs required for putting the mine into operation, in particular, using mining equipment that is already available in the project area. It expects to complete the estimate for smaller capital and operating costs to put the mine in operation during 2024. The Merlin deposit features 11 kimberlite pipes, eight of which were developed by Rio Tinto and Ashton Mining between 1999 and 2003; in total, 500 thousand carats of diamonds were recovered. As of late 2022, the identified and inferred resources of the deposit amounted to 27.8 mn tons of kimberlite ore with an average diamond grade of 0.16 carats per ton (4.35 mn carats of diamonds).
India
The prospects for the Bunder diamond project implementation in the Indian state of Madhya Pradesh remain uncertain. Rio Tinto carried out exploration under the Bunder project for 12 years since 2004. Inferred resources of the Bunder kimberlite pipe as of late 2015 (in accordance with the Rio Tinto’s annual report for 2015) were estimated at 44 mn tons of ore with an average diamond grade of 0.7 carats per ton (30,8 mn carats of diamonds). The state government signed an agreement with Rio Tinto in 2011 and granted a 30-year mining contract to the company, but in August 2016, Rio Tinto announced it would not proceed with the project development for commercial reasons. The real reason for Rio Tinto’s exit was the recurrent disputes with local environmental activists and the lack of support for this project from the state.
In 2019, the Madhya Pradesh government put the Bunder project up for sale, and the rights to it were acquired by Essel Mining owned by India’s Aditya Birla Group. The company’s official website states that the company is in the process of obtaining regulatory approvals such as mine plan approval and environmental permits, but there is no current information on its progress.
Russia
In Russia, the ALROSA company is preparing the Mayskoye primary kimberlite deposit and the associated Mayskoye placer in the Republic of Sakha (Yakutia) near the operating Nyurba Mining and Processing Plant to carry out open-pit mining. The commissioning of the facilities is scheduled for 2025; the plans are to mine about 300 thousand tons of ore and recover 1 mn carats of diamonds annually for 15 years. In addition, ALROSA is developing several alluvial deposits in Yakutia.
In September 2023, the company announced the construction of a new underground mine - Mir Glubokiy - on the Mir kimberlite pipe. The mine was mothballed in August 2017 after an accident that claimed eight lives. As of early 2022, the Mir pipe’s diamond reserves amount to 129.7 mn carats in categories A+B+C1 and 3.3 mn carats in category C2, which is more than 13% of Russia's diamond reserves. The average diamond grade is relatively high at 3.61 carats per ton of ore. Diamond mining at the new underground mine with a design capacity of 3 mn carats per year is scheduled to start in 2032 and continue for 30 years. Investments in the construction of the mine are estimated at 121.5 bn rubles.
Russian junior mining company ALMAR plans to begin diamond mining at the Beenchime placer deposit in 2024, and later on, at the Khatystakh placer in Yakutia.
The reserves of the Beenchime placer are estimated at 433 thousand carats of diamonds in categories C1+C2, the inferred resources of categories P1+P2 are estimated at 1.8 mn carats. The average cost of diamonds is about $100 per carat. The plans are to carry out the development from 2024 to 2030 with an option to extend the development period until 2035.
The inferred resources of categories P1+P2 of the Khatystakh placer for open-pit mining are 19 mn carats with a high average diamond grade (4 carats per cubic meter of ore) and a low average cost ($25 to $30 per carat). ALMAR plans to carry out mining at the placer for five years (from 2026 to 2030) with an option to extend the mine life until 2050.
In all likelihood, the majority of the ongoing diamond mining projects are based on small-scale and medium-scale deposits with a relatively small designed annual capacity, which is offset by the high cost of recovered gemstones in a handful of cases. Thus, the plans of the world’s largest diamond mining companies to transfer their mines to underground operation are more than justified; obviously, there is practically no choice. Small-scale projects are suitable for small companies; major diamond miners can be interested in them only if they have a good location (near operating mines) or very high-quality rough diamonds. One way or another, the reserves for underground mining at large deposits are not unlimited either, and if the effectiveness of geological exploration for diamonds remains at the same level in the next 20 to 30 years, the market will face a serious shortage of precious rough diamonds in the longer term.
Anastasia Smolnikova, Senior Expert Analyst at the Institute for Natural Monopolies Research, for Rough&Polished
