Global diamond reserves declined from about 2.6 billion carats in 2000 to just over 2.3 billion carats in 2012, the AWDC and Bain & Company third annual global diamond industry report shows.
The report, which was published in August, stated that the total level of diamond reserves had remained fairly stable in recent years (at 2.3 billion carats) with total global production roughly offsetting additional reserves.
Most new reserves were incremental and of relatively lower quality than diamonds currently being extracted, reads the report.
Russia and Africa hold 70 percent of global diamond reserves.
Although Russia (where scientists claimed the existence of a secret diamond deposit last year that contains “trillions of carats” of the rare gem) and Australia had demonstrated most growth, African countries account for most resources, AWDC and Bain said.
The true level of Africa’s reserves and resources was likely higher than known, because large sections of the continent that potentially hold diamonds (for example Zimbabwe) remain unexplored.
As home to the largest diamond reserves in the world, the African continent (particularly southern Africa) had of late shown a bright future.
The largest mine expected to come online is the Gahcho Kué mine in Canada’s Northwest Territories. Developed by Mountain Province Diamonds and De Beers, Gahcho Kué is projected to produce up to 6.1 million carats annually, by 2020 and then decline to 2.8 million carats by 2023. The Karpinskij pipe is expected to increase output to around 2.6 million carats annually thus lifting total ALROSA production at the Lomonosov diamond field to 5.2 million carats in 2023 from 0.6 million carats in 2012. Rio Tinto’s Bunder mine in central India is projected to yield roughly 2.5 million carats per year when it comes fully online in 2016 or 2017.
TSX-V-listed explorer Pangolin Diamonds announced last month that it had discovered what it believed to be one of the largest-ever kimberlite pipes in the world at its Tsabong North project, in Botswana.
It modelled the kimberlite at 270 ha, making it comparable with Lucapa’s Se251 kimberlite in Angola that measures 220 ha, the MK1 kimberlite in Botswana that measures 180 ha, and the Mwadui kimberlite in Tanzania, which measures 146 ha.
The new discovery stemmed from the explorer’s discovery earlier this year of two kimberlites, Magi-01 and Magi-02, at the same project.
Pangolin said further work would start shortly, with seven additional holes laid out for core drilling to determine the final size of the Magi-kimberlite.
Each hole would intersect at least 100 m of kimberlite to recover any additional indicator minerals, and any diamonds.
“The geophysical models available to Pangolin strongly suggest the potential for discovering additional very large kimberlites in the Tsabong North project area,” said Pangolin chairperson Leon Daniels.
A report released recently by consulting firm Sínese and investment bank Eaglestone also projected that Angola's rough diamond production had the potential to rise to higher levels never seen in the last decade.
It cited signs of an expansion boom at Lucapa, which increased exploration activity at the Lulo concession. De Beers was also attempting to establish the economic viability of 22 of 117 kimberlites and diamond production had either begun or will soon at the alluvial diamond mines of Tchegi, Calonda, Maua, Uári and Cambange.
The continent also had the potential to produce more gems beyond the lifespan of existing mines.
Debswana, a joint venture between De Beers and Botswana was also considering another pit extension at its Jwaneng diamond mine.
Cut-9 would result in 1 billion tonnes of earth being moved, therefore taking the mine to a depth of 850 meters.
Debswana was currently engaged in another expansion project called Cut 8 that seeks to push Jwaneng's life into 2025.
It pumped $3 billion into the project, which was expected to yield 100 million carats worth $15 billion over the life of the mine.
Jwaneng, the world's richest mine by value, produces on average about 10-million carats a year and plans to build output to 12-million carats in five years.
More can be said about Zimbabwe, which would contribute significantly to supply growth, with expected stable output of about 12 million carats per year through 2023.
Fresh reserves, albeit small, are also being found in countries such as Lesotho, South Africa, the Democratic Republic of Congo, Sierra Leone and Cameroon.
One cannot mention the potential of Namibia’s marine diamond mining.
Apart from production, the continent was increasingly getting conscious of the need to beneficiate its rough to derive maximum benefits.
The value of diamonds increases significantly as they travel through the pipeline from the mine to the final market, nearly quintupling over the course of the journey, states AWDC and Bain’s report.
It also noted that the greatest value - $25 billion or more in both cases - was added at the jewelry manufacturing and retail stage.
Rough-diamond production generates revenues of $14.8 billion but this grows to $47.2 billion when the diamonds are manufactured into jewelry and grow again to $72.1 billion when the jewelry is sold at retail.
The AWDC and Bain report stated that the biggest government promoter of beneficiation policies in Africa was Botswana, which had a longstanding tradition of supporting its local cutting and polishing business.
Botswana’s cutters and polishers were also expected to gain from De Beers’s decision to move its Diamond Trading Company’s aggregation, quality-assurance and sight-preparation operations from London to Gaborone.
However, Botswana’s potential to grow into a major cutting and polishing center was limited.
“The country’s labor costs are high compared with those of China and India, and its cutters lack expertise comparable to that of craftsmen in Europe, Israel and the US,” the report reads.
“The growth of Botswana’s cutting industry may well be limited until it is better able to compete on cost with the industry in India and China.”
This was also a reflection of what other African countries willing to beneficiate their rough were facing.
Mathew Nyaungwa, Editor in Chief of the African Bureau, Rough&Polished
