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DRDGOLD Q3 gold output climbs 10% as revenue reaches over $180m

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Antofagasta Q3 copper output up 7%, annual guidance maintained

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Diamonds: Made in China

24 march 2010

Rough diamond is the hardest mineral on the Earth. This feature virtually defines its importance in the modern world’s development. It is not only used as raw material for manufacturing polished diamonds, it finds application in various fields: from microelectronics to the space industry. During its development China did not manage to avoid the “diamond issue” as well.  

Now China is the world's largest manufacturer of artificial diamonds. Over 600 companies are engaged in this industry. Annually they make up to 400 million carats of diamonds. Of course, in many respects synthetic diamonds permit to meet the needs of the industry. However, still there are spheres where artificial stones are not capable to replace natural diamonds. Therefore, China among many other problems has also to solve the task of developing its own diamond mining which would allow it to reduce its dependence on import. 

China has the largest reserves of diamonds in Asia. The reserves of its discovered deposits are estimated at 23 million carats. China’s annual output amounts to about 100 000 carats. But prospecting works in China proceed: in 2005 at the All-China Geological Symposium it was announced that new exploration for diamonds will be performed in the area of the South China Platform.. 

First finds 

According to the Chinese sources, for the first time diamond was mentioned in the Book of Jin (historical chronicles of Jin Dynasty, from 265 to 420 AD): the emperor received a diamond as a gift from India rich with diamond deposits at that time.  

In the end of 16th century under the rule of the Ming Dynasty there appeared the first description of diamond in the Compendium of Materia Medica. And in 1625 diamond beds discovered on the territory of the modern Shandong Province were mentioned in documents for the first time. At that time diamonds, as a rule, were used for drilling chinaware. 

At the turn of 17th-18th centuries there were records about finding diamonds in the Province of Shandong, Hunan, and in East Turkmenistan (the modern Xinjiang Uygur Autonomous Region). In the middle of the 19th century diamonds were found in the Hunan Province in the vicinity of Changde where peasants were panning gold in the Yuanshui River.  

In 1937, a farmer found a diamond weighing 218.65 carats in the Tancheng District of the Shandong Province. Because of its golden hue it received the name of Golden Hen (Jinji). However, during the Japanese occupation its trace was lost. 

Diamond exploration in New China 

After the Peoples Republic of China came into being in 1949 the new government faced a host of problems one of which was absolute absence of own diamond deposits resulting in dependence on import from other countries. Therefore in 1952 China organized the first exploration team whose main task was to find diamond fields.  

The valley of the Yuanshui River in the Hunan Province became the basic area of exploration. In 1958, the first diamond mine, No. 601, was opened in the vicinity of Changde. By 1964, there were discovered four open-type diamond deposits in the Juanshuj River valley. By estimates, diamond reserves there run at 743 000 carats. The share of top quality diamonds reaches 60-70%.  

In 1958, another diamond mine, No. 803, was launched in the Tancheng District of the Shandong Province. When in 1968 its construction was completed its output reached 3000 carats a year. 

In 1964, the Chinese geologists switched over to large-scale diamond exploration – now their major interest was focused on Kimberlite pipes. After three years of exploration in the Mengyin District of the Shandong Province they discovered the first Kimberlite pipe which had sufficient diamond reserves to start commercial mining. It was named Red Banner No. 1. By 1977, they revealed five more Kimberlite deposits in this area fit for commercial development. 

In 1971, in the Wafangdian District of the Liaoning Province there was discovered another Kimberlite pipe. By 1980, six more pipes were found in the area: No. 30, No. 42, No. 50, No. 57, No. 68 and No. 74. In 1987, Pipe № 50 was put into operation. For the present moment the Vafandjan area possesses the largest diamond reserves with more than 70% of stones graded as first-rate quality and suitable for cut. 

In general, for the last 50 years China discovered over 20 Kimberlite pipes and more than 100 alluvial diamond fields. But exploration works proceed. In the beginning of 2010 it was announced that one more large deposit in the Vafandjan area had been found and its reserves were estimated at 210 000 carats. 

Major diamond deposits in China 

More than 50% of the discovered diamond reserves are concentrated in the Liaoning Province. They are estimated at 11 million carats. The province is developing 9 diamond fields: 6 Kimbelite and 3 alluvial types. Deposits are concentrated in the Vafandjan area. They have been developed since 1987. On the average, about 60 000 carats are recovered annually. However, in 1996 there was registered a record output of 88 000 carats. Kimberlite Pipe № 50 was developed during 20 years and in 2004 it was closed. More than 65% of diamonds mined in Vafandjan are used for manufacturing polished diamonds of which almost 95% are exported to the United States, Belgium and Hong Kong. 

The Shandong province is the second-largest diamond producer in China giving more than 9 million carats. One of its basic deposits is mine No. 701 in Mengyin. It has been developed since 1976. It is annually yielding about 50 000 carats. In 1995, when its output reached a minimum level, more than half of works were suspended. In 1998, with the participation of Canada’s Abacus Mining and Exploration Corporation the mine switched over to underground diamond mining which permitted to reach a potential output of 100 000 carats. However, actually the output level remained at 50 000 carats in a year. The major part of recovered diamonds goes for industrial use, and only one fifth of them qualify for being polished. The greater part of these stones is exported to South Korea, Japan, the U.S.A., Belgium and India.  

Diamond reserves in the Changde area of the Hunan province and in the Xinyi District of the Jiangsu Province are estimated at 500,000 carats. Diamond deposits in the Chande area have been developed for more than 50 years. On the average they yield about 20 000 carats of diamonds a year. 

China is the most fast-growing sales market for diamonds and jewelry. The Chinese population, and especially its well-to-do part, are gradually instilled the culture of “diamond consumption.” And, certainly, full dependence on imports in such a sphere cannot suit the Chinese government. Therefore, it is pro-active in stimulating and sponsoring diamond exploration in the country. Due to the newest technologies and by attracting world experts, China manages to achieve really significant discoveries and expand its potential in diamond mining. 

Olga Merekina for Rough&Polished from Shanghai