De Beers said the global greenfield diamond project pipeline remains sparse with just two scale projects currently in development.
These were the Gahcho Kué project owned by De Beers and Mountain Province Diamonds as well as Stornoway Diamond’s Renard project.
Both projects were expected to begin production in 2016, De Beers said in its latest "Diamond Insight Report".
Three new greenfield mines commenced production last year.
Alrosa commissioned a further new mine, Botuobinsky, early this year.
Two of these mines (Grib, operated by Lukoil, and Karpinskogo-1, operated by Alrosa) are located in Western Russia.
The third project was the Ghaghoo mine operated by Gem Diamonds in Botswana, making it the country’s first underground mine.
De Beers said Alrosa had also announced its intention to begin mining the Verkhne Munskoe pipe in 2018.
“While the development of new greenfield mines has been limited, several brownfield expansions are currently producing or are planned to start production over the next five years,” the group said in its report.
“Rio Tinto is transitioning its operations underground at its Argyle mine in Western Australia, while similarly Alrosa is moving the Udachny mine from an open pit operation to an underground mine.”
The group, through Debswana in Botswana in which it controls a 50 percent stake, was also currently stripping waste for the Jwaneng mine Cut-8 project, which was scheduled to start producing in two years and extends the life of mine to beyond 2030.
De Beers was also constructing an underground mine at Venetia in South Africa, which would ensure diamonds are recovered at the mine until at least 2043, it said.
“Further brownfield expansions are expected to take place in Canada’s Northwest Territories where Rio Tinto and Dominion Diamond Corporation have announced plans to extend production at both the Diavik and Ekati mines,” it said.
“Rio Tinto and Dominion Diamond Corporation will produce from a fourth pipe at Diavik (called A-21) starting in 2018.
“Dominion Diamond Corporation is also proceeding with plans to mine the Jay pipe at the Ekati mine. This project would produce first ore in 2020 and extend the life of Ekati to 2030.”
The report also noted that Firestone Diamonds was building the main treatment plant at the Liqhobong mine in Lesotho.
This, it stated, would up diamond production to about 1 million carats by 2019.
The plant was expected to be commissioned next year.
“The total impact of the rough diamond production expected from both greenfield mines and brownfield expansion is expected to lift total carat production to levels similar to the mid-2000s but, owing to the mix of new diamonds mined, value growth is expected to be less pronounced,” said De Beers.
Production
Meanwhile, De Beers noted that rough diamond production was more than $19 billion last year in value terms, representing an increase of about 6 percent over 2013.
Global production, however, declined in carat terms last year by about 3 percent.
The group said that the largest producing countries by volume were Russia with 27 percent, the Democratic Republic of Congo with 19 per cent, Botswana with 17 percent, Canada with 9 percent and Australia with 7 percent.
As revealed earlier in the year by the Kimberley Process, Russia was also the largest producing country by value with 26 per cent of the total value produced in 2014, the same share as in 2013.
Botswana, which surrendered its poll position to Russia, was the second-largest producer in value terms with a 23 per cent share followed by Canada with 12 per cent, Angola 9 percent and South Africa with 7 percent.
“Because of the type of diamonds mined in the Democratic Republic of Congo, its share of value of world production is estimated at approximately six per cent,” said De Beers.
Looking at companies, Alrosa and De Beers were the two largest producing groups in 2014 by both volume and value, it said.
Alrosa’s share of production was 26 percent in 2014 up from 25 percent the previous year in volume terms, while De Beers was second with 23 percent up from 21 percent in 2013.
Rio Tinto was the third-largest producer with a 10 per cent share down from 2013’s 11 percent. De Beers remained the largest producer of diamonds by value with an estimated 34 per cent share followed by Alrosa with a 25 percent share.
Dominion Diamond Corporation and Angola’s Catoca were tied as they registered a share of 5 percent respectively.
Rio Tinto followed with 4 percent, a decline from 5 percent recorded a year earlier.
“A notable trend in global rough diamond production in 2014 was the decline in carats recovered from the Marange operations in Zimbabwe,” said De Beers.
“It is estimated that approximately five million carats were recovered from these operations in 2014, representing a drop of more than 50 per cent compared with 2013 production volumes.”
Mathew Nyaungwa, Editor in Chief of the African Bureau, Rough&Polished
