Diamond Mining – Page 31 – The Diamond Certification Laboratory of Australia (DCLA)

Alrosa Raises Rough Prices Again

Alrosa has increased prices for the third consecutive contract sale, fueling concerns about unsustainable growth and tight manufacturing profits.

The adjustments were 4% to 5% on average, with a focus on 1-carat rough and larger, insiders told Rapaport News this week. Prices of that category are now higher than pre-pandemic levels, a customer noted.

Alrosa declined to comment on its “commercial strategy,” but a spokesperson said the Russian miner “assures that prices for its goods follow the real, confirmed demand from the midstream sector.”

The sale, which took place this week, came amid strong rough demand following positive holiday seasons in the US and China. But there were warnings of a slowdown as the quiet season approaches.

“Since the rough market is so strong, everyone accepts the [prices], but it’s becoming a bubble that might explode,” a source cautioned.

Industry members highlighted possible challenges for manufacturers. Rough prices have outpaced polished, they claimed, with the upcoming slow months raising concerns about end demand.

“[The miners have] taken away all the profit margin from the manufacturing pipeline, because…when the polished is ready, the polished market will be slightly weaker than today,” an Alrosa customer explained. “Probably, we will all lose some money, and not even make the costs.”

Alrosa maintained its policy of allowing customers to refuse any unwanted goods — a concession that has been in place since the start of the pandemic.

However, some clients felt compelled to buy to ensure they retain their allocations in the new contract period, which begins April 1, one customer pointed out. Even so, rough sales at the trading session will likely be lower than the $421 million it reported for January and the $361 million it garnered in February, reflecting a drop in the miner’s supply, he added.

De Beers: Less availability

De Beers will also offer limited supply at its sight next week as its reduced production plan for 2021 has affected availability. Sources expect sales of around $400 million, compared with $663 million in January and $550 million in February. The company lowered its full-year production forecast in January because of operational issues at some of its mines.

“We continue to take a prudent approach with our mine plans given the ongoing pandemic and associated uncertainty,” a De Beers spokesperson said Wednesday.

With fewer goods on the table, further price increases by De Beers are unlikely at next week’s sale, a sightholder predicted. The miner already increased prices in December, January and February, reversing a sharp price cut it implemented in August.

“There was a major pushback on the goods last month,” the sightholder commented. “In anything that [produces] pointers and large [polished goods], they went way too far, and everybody said so. There were also refusals. If [prices] go up now, everyone will just leave the goods.”

Source: Diamonds.net

Beware a Supply Bottleneck

The positive sentiment the diamond market experienced during the past few months was a welcome change from the gloomy tone that characterized 2020. Buoyed by holiday sales that proved better than expected, the trade gained the confidence to buy again, even with activity limited mostly to online platforms.

For the first time in many years, polished suppliers struggled to fill orders due to shortages during the fourth quarter. Just a year earlier, the midstream was plagued by what seemed to be a chronic oversupply that pushed down polished prices and caused profit margins to tighten. Among the few benefits of the Covid-19 lockdowns was that manufacturers were forced to freeze rough purchases, stop production, and start depleting the excess inventory they had.

With fewer goods available, it was understandable that the rough market would wake up again in the fourth quarter. The resurgence was a remarkable one, too: The combined volume of De Beers’ and Alrosa’s rough sales rose 57% year on year to 23.9 million carats in the final three months of the year. That’s more carats in a quarter than the two have sold since the beginning of 2017 — itself an anomaly period that arguably fueled the ensuing oversupply crisis.

The positive momentum continued into the new year with reports of sizable rough sales last month. De Beers notched its largest sight in three years, while Petra Diamonds and Mountain Province continued to see good demand at their tender sales, with prices up 8%.

In the February issue of the Rapaport Research Report, we consider the question of whether the strong rough sales are a product of polished demand or of the low supply that typified the market earlier in 2020. It could be both. What’s certain is that the rough market must cool in the coming months or risk throwing the industry back into a polished-oversupply scenario.

Such an event would undo the hard work that went into restoring an equilibrium between the rough and polished markets. It would also fuel skepticism about the stated intention — by miners, manufacturers and retailers alike — of ensuring the diamond market becomes demand driven and more efficient in its operations.

Now, at the start of February 2021, the industry is at a crossroads. Manufacturers must curb their rough purchases to maintain the balance we’ve achieved in recent months and ensure a sustainable recovery. While the holiday season was relatively positive for the industry, global diamond jewelry sales have not yet returned to pre-pandemic levels and are unlikely to do so this year. For now, this means the recovery remains a supply-driven one, and the industry needs to walk the fine line between caution and its enthusiasm to do business again.

Source: Diamonds.net

Mountain Province’s first diamond sale of 2021 shows 8% price rise

After a devastating 2020 which saw a near-collapse in the global diamond trade, Mountain Province Diamonds‘ latest sales figures show the sparkle may be starting to return to the diamond sector.

The 49% owner of the Gahcho Kué mine in the Northwest Territories, operated by 51% owner De Beers, sold 241,827 carats of diamonds for $21.8 million or $90 per carat in the sale, which closed on Jan. 22 in Antwerp. That represents an encouraging increase from an average sales price of $64 per carat in the final quarter of 2020 and $37 per carat in the third quarter.

“The first sale of the year was excellent, the growing confidence amongst rough diamond buyers translated into a healthy price improvement of 8% on a like for like basis when compared to our record high volume December sale,” said Mountain Province president and CEO, Stuart Brown, in a release. “We expect to see a continuation of the positive trend as rough and polished markets continue to strengthen post a successful retail season.”

The company’s next sale, in February, will include the 157-carat “Polaris” gem diamond, recovered in the fourth quarter. Named after the North Star, the stone appears colourless in daylight, but under ultraviolet light “exhibits a rare natural blue fluorescence that echoes its Arctic origins.”

Mountain Province recently released its production and sales results for the fourth quarter. Two confirmed cases of covid-19 during the quarter affected production as existing health and safety precautions were further enhanced. For the quarter, the operation saw a 12% decrease in total tonnes mined (ore and waste), a 21% decrease in tonnes treated (to 736,140 tonnes), and a 23% decline in carats recovered (to 1.5 million carats).

Mountain Province’s share of fourth-quarter production was nearly 745,600 carats.

For the year, the company recorded total sales of 3.3 million diamonds at an average price of $51 per carat for C$227 million ($171.3 million) in revenue.

“Under very difficult circumstances, all driven by Covid-19, the Gahcho Kué mine has performed well in being able to maintain production, albeit at a reduced level, and came very close to the revised guidance in tonnes mined and treated and exceeded the revised guidance target for carats recovered,” Brown said earlier this month on the release of the production figures. He added that the carat recovery was “particularly pleasing under the circumstances” and positioned the company for positive sales numbers in the first quarter of 2021.

Brown said that the last quarter of the year saw a “strong recovery” in the diamond market. In addition, the late 2020 closure of Rio Tinto‘s high-volume Argyle mine in Australia is expected to help establish a “more balanced” supply and demand equilibrium.

“The diamond market came under unprecedented pressure from early March to early September and although this pressure remains, we did see a strong recovery with respect to rough diamond demand in the last quarter of the year,” Brown said. “The two sales during the last quarter saw significant price recovery across all categories of diamonds sold. Early diamond jewelry retail sales reports are encouraging, and we expect to see steady demand for rough diamonds in the first quarter of 2021. There will no doubt still be challenges ahead but we are certainly more positive in our outlook as we start 2021 compared to the middle of 2020.”

Source: Canadian Mining Journal

Threat of synthetics is an opportunity for diamond traceability

The Namibia Desert Diamonds General Manager of Sales and Marketing, Lelly Usiku, said the threat of synthetic diamonds has brought about an opportunity in the diamond industry to focus on the traceability of the precious stones to verify diamond origins from the mines to jewellery.

Usiku expressed these sentiments during a panel discussion on the diamond industry and its associated value chains. She further outlined that Covid-19 forced Namdia to investigate the possibilities of online trading in order to replicate the physical viewing with a virtual viewing experience.

Chief Executive Officer of Namdia, Kennedy Hamutenya, said in protecting the image of diamonds, the industry made a commitment in 2008 on the number of producers and manufacturers through the Kimberly Process. He said the process helped squeeze out undesirable elements from the diamond business.

According to Hamutenya, trading partnered states agreed to create a menu for the world and buyers that ensured diamonds on the market would not be associated with conflict diamonds. Conflict diamonds are diamonds mined in a war zone and sold to finance an insurgency, an invading army’s war efforts, or warlord activities.
“So, we said every country must implement systems and procedures from the very starting point of mining to the point of export to ensure that there is no penetration of conflict diamonds.

Today, as we speak, 99.8% of all our diamonds are clean, thanks to the Kimberly Process. We have done everything possible to prevent conflict diamonds to penetrate our pipeline,” Hamutenya stated.

According to him, Namdeb Holdings has spent N$3 billion on local procurement of goods and services for the last financial year.
Also, at the same occasion, Brent Eiseb, CEO of the Namibia Diamond Trading Company, elaborated on their mandate and said they sort and value diamonds. He noted that the process entails highly skilled employees as well as technology.
He added that whether diamond mining happens on land or offshore, the value is only confirmed when the stones go through NDTC’s evaluation process.

“This is an important process as it determines the value of royalties and taxes that is to be paid by producers to the government. Another mandate is to facilitate downstream diamond beneficiation.
We take about N$430 million in indexed diamonds and make them available for value addition in Namibia,” explained Eiseb.
He added that this process is vital because it requires quality infrastructure, especially in Namibia, for cutting and polishing of diamonds and also for creating the most job opportunities.

Eiseb concluded that the diamond industry is important in providing for the country at large through development diamonds. He indicated that 85% of total revenue that is created through the sales of diamonds ends up in state coffers through royalties, taxes, and levies that are payable and dividends.

Source: neweralive

Star Diamond recovers 2,409 diamonds in second bulk sample

Star Diamond Corp announced that a total A total of 2,409 diamonds weighing 123.27 carats have to date been recovered from the second bulk sample trench (19FALCT004) excavated on its Star kimberlite at the Fort à la Corne kimberlite field in central Saskatchewan.

These initial results are from the second of 10 bulk sample trenches excavated by 60% optionee Rio Tinto Exploration Canada Inc in 2019.

The average diamond grades from the first two trenches are similar to historical diamond grade results detected from the underground bulk sampling and large diameter drilling completed on the Star kimberlite between 2004 and 2009. These results are also similar to the overall weighted average grade 14 carats per hundred tonnes reported in Star Diamond’s PEA of the Star and Orion South kimberlites .

The three largest diamonds recovered to date from 19FALCT004 are 2.98, 2.03 and 1.99 carats, respectively, and were all recovered from Early Joli Fou kimberlite. The EJF is the dominant kimberlite unit within the project in terms of ore volume and diamond grade.

As disclosed by Star Diamond on August 4, 2020, there are indications that recent diamond breakage has occurred in the diamond parcels recovered thus far from RTEC’s trench cutter bulk sampling program, suggesting that the extraction and/or processing systems being used by RTEC may be resulting in diamond breakage. Comprehensive diamond breakage studies are required to assess the nature and extent of the diamond breakage resulting from RTEC’s methods and the possibility that larger diamonds would have been recovered absent such breakage.

Senior vice president of exploration and development, George Read, states: “The initial diamond results from 19FALCT004 and 19FALCT001 continue to show grades similar to the previous underground bulk sampling and LDD performed by Star Diamond on the Star kimberlite. Individual EJF kimberlite samples recovered in the first two trenches exhibit a range of grades 9.81 to 21.22 cpht for 19FALCT004 and 4.88 to 23.34 cpht for 19FALCT001, which are as expected for the EJF kimberlite.”

Source: resourceworld

Southstone Minerals recovers many large, high quality diamonds

Southstone Minerals Ltd. [SML-TSXV] provided a production and operational update for December 1, 2019, to February 28, 2020 (Q2 2020), and March 1 to May 31, 2020 (Q3 2020), on its project portfolio in South Africa.

The Oena Project consists of one New Order Mining Lease located in the Northern Cape Province, South Africa. Oena is 8,800 hectares in size and covers a 4.8-km wide strip along a 15-km length of the lower Orange River. Southstone owns 43% of African Star Minerals (Pty) Limited which owns 100% of the property.

Southstone continues to focus and prioritize its efforts on the alluvial Oena diamond mine. There is currently one mining contractor on site using eight pan plants to process run-of-mine (ROM) material and one Bourevestnik (BVX) unit used for diamond recovery.

Production results for both Q1 and Q2 were impacted as a result of the mandatory closure of the mine for the period from March 26, 2020, to May 3, 2020, due to COVID-19. A total of 803.92 carats (112 diamonds) were produced, placed on tender and sold with an average price of US $1,957 per carat.

Bluedust Carats produced No. of stones US$/carat

Q2 2020 ROM 588.14 77 1,942

Q3 2020 ROM 215.78 35 2,001

The Oena diamond mine continues to produce very large and high-quality diamonds. For example, 52.62 carats (sold for US $127,975), 44.25 carats (US$243,000), and 37.03 carats ($188,962). Twenty other stones were greater than 10 carats.

Kwena Group, Republic of South Africa

Shareholders approved the disposition of the Kwena Group on May 15, 2020, and the company received final approval from the TSX Venture Exchange on the May 25, 2020. This disposition of the Kwena Group resulted in a total of 4,527,416 shares being returned to treasury and the forgiveness of outstanding indebtedness of the equivalent of $1.2-million.

Southstone agreed to settle an outstanding debt of $35,430 to two creditors by issuing 708,600 shares at $0.05 per share, subject to TSXV approval.

Source: resourceworld.com

Dominion Diamond unveils plan to avoid bankruptcy

Canada’s Dominion Diamond Mines has unveiled a transaction that would allow it to exit court protection from creditors and access short-term operating funds, which would pave the way to eventually restart its idled Ekati mine in Canada’s Northwest Territories.

The company, which owns and operates the iconic Ekati diamond mine and also has a 40% interest in the nearby Diavik, said it had signed a letter of intent with an affiliate of The Washington Companies.

The privately held Montana-based conglomerate bought Dominion for $1.2 billion in 2017 when the miner was the world’s third-largest producer of rough diamonds by value.

Under the agreement, which requires court approval, Washington would buy the company’s assets for about $177 million, while assuming its operating liabilities.

It would also provide Dominion with up to $84 million in short-term debtor-in-possession financing.

Ekati has been halted since March to help slow down the spread of the coronavirus pandemic. The operation was left with about $180 million worth of inventory, which it has been unable to sell since its Belgian retailers remain closed.

The diamond miner said at the time that covid-19 had a “devastating impact” on the global diamond mining industry, affecting the company.

According to court documents seeking bankruptcy protection from creditors, Dominion revenue from diamond sales last year reached about $528 million.

The company said the proposed sale would be conditional on reaching an agreement with Rio Tinto on the Diavik joint venture. Failing that, Dominion would exclude its interest in the Yellowknife diamond mine from the transaction.

The miner is a major employer in the Northwest Territories, with 634 workers, 60% of whom are locals. Only 212 people are currently at the mines, which are fly-in and fly-out operations. This allows for a pre-screening of the staff before they are allowed to board flights to Ekati and Diavik.

Shattered dreams

The global coronavirus outbreak squashed diamond miners’ dawning hopes of a recovery in a sector already reeling from weak prices and demand since late 2018.

De Beers, the world’s largest producer by value, cut 2020 production guidance by a fifth last month after earlier cancelling its April sales event.

Russia’s Alrosa, the world’s top diamond producer by output, saw sales for rough and polished diamonds drop to $15.6 million. The figure stood in stark contrast to the $152.8 million the diamond miner fetched in March and the $405 million in January.

Lucara Diamond, another Canadian company, posted earlier this month a net loss of $3.2 million, or $0.01 a share, for the first three months of the year.

The figure was in sharp contrast with the $7.4 million in net income, or $0.02 in earning per share the miner reported in the same period last year.

South Africa’s Petra Diamonds recently delayed interest payments to borrow $21 million in new debt, a crucial move to keep the company afloat.

Investment banks are increasingly reluctant to extend credit to diamond producers, as inventory is not being sold and defaults are possible, analysts have warned.

“We are concerned about an oversupply of rough diamonds following the reopening of economies, as a lot of inventory could potentially be flooded into the system and the market might not be able to absorb all of it, resulting in increased pricing pressure,” Citi said in an early May note.

Source: mining.com

Zimbabwe’s ZCDC Sets Sight On Doubling Diamond Production

The Zimbabwe Consolidated Diamond Mining Company (ZCDC) failed to meet its 2019 target of 3 million carats, but officials are buoyant fortunes will turn around as the firm has consolidated its investments in exploration, mining and processing to improve output this year.

Speaking durng a media tour of Chiadzwa diamond fields on Friday last week, Acting ZCDC Chief Executive Officer Roberto DePreto said they are aiming to double the 1.6 million carats produced last year through joint venture agreements, increased exploration as well as mitigating viability challenges, linked to power shortages and access to foreign currency.

“Since the Diamond Policy was issued we are now looking for joint venture partners, those joint venture partners get allocated a particular concession and we then subdivide the (overall) 626 special grant into specific special grants for those venture companies.

“Last year we produced 1.6 million carats and this year we are targeting to double that through our investments in new plant machinery and our exploration capabilities,” said DePreto.

Consuming an average of 5 megawatts and at 25 000 of diesel daily, ZCDC has also invested in new plant machinery from Belarus which needs foreign currency for repair and maintenance, with at least seventy percent of consumables and spares imported.

Officials said such overheads have hampered production targets, costing in total a minimum of 8 million tons of unprocessed diamond ore from the down time caused by the listed operation constrains.

Mine manager, Innocent Guvakuva said focus will be placed on optimizing processing capacity, already on a positive trajectory following acquisition of new plant machinery, as well as improving power supply to reduce production downtime.

“Last year there were issues to do with power, this year there has been a bit of improvement but last year it was worse, issues to do with fuel and general forex availability because 70 percent of all consumables and spares we import.

“So, if your foreign currency access scenario is not stable you are bound to suffer, but this year things have started on a better note… one of the biggest challenges in Zimbabwe is that we are a cash economy.

“We lost a lot last year in terms of production down time we lost, probably in terms of total material mined we are looking at about 8 million tones that we could have moved last year, which is very big,” said Guvakuva.

He added, “We have installed a 450 ton per hour plant it’s got phases now we are installing phase three where carat production is expected to go up, our focus now in terms of mining we are stable but it’s the liberation and optimization of the plant that we will work on.”

Guvakuva said focus will also be placed on greenfield and ground field, together with exploration contractors under a ‘hybrid exploration model’ in the seven approved special grants in regions considered diamondiferous.

“We are increasing our exploration through a hybrid model in the sense that we have our own exploration drill rigs, commissioned them in 2018, they are called diamond drill rigs that can drill up to 250 metres, we have what we call a Reverse Circulation Rigs (RCO).

“We have also engaged contractors which makes it the hybrid model, they have done work right now the contract has ended, but we are doing a lot of exploration we have a lot of ground field and greenfield projects all over the place.

“ZCDC we have seven approved special grants, in this whole area which is about 26 to 30 kilometers its assumed to be diamondiferous, but the economics of it is what we do through exploration. To say we will be here for two or three years I will be lying (is an under estimation) but we will be here for a very long time,” said Guvakuva.

Source: allafrica

BlueRock Diamonds Reports Profitability

BlueRock Diamonds has announced that it operated profitably for the first time in the second half of 2019. The miner started operations in 2012.

The AIM-listed diamond producer, which owns and operates the Kareevlei Diamond

Mine in the Kimberley region of South Africa said its revenue was up 190 percent to Â£4.1 million ($5.4 million) for full year 2019.

The miner sold 12,675 for the year, an increase of 118 percent over the 5,805 carats in 2018. On a quarterly basis, Q4 2019 saw an increase of 172 percent to 4,170 carats compared to 1,533 carats in Q4 2018.

BlueRock also saw an increase in its average price per carat during Q4 and FY2019. For 2019, the per-carat price increased 24 percent to $415 (2018: $334) and for the quarter it rose 30 percent to $410 (2018: $316).

“I am very pleased with the continued success at Kareevlei,” said Mike Houston, BlueRock executive chairman. “Having achieved the aggressive guidance for 2019 and operated profitably for the first time in the second half of 2019. We are proud of this key milestone, which is a testament to the implementation of the revised production strategy brought in by the company’s new management team in Q2 2019.”

BlueRock said it expects to report positive EBITDA and positive comprehensive income for

the second half of 2019 (excluding non-cash adjustments for IFRS 9 charges and movement in foreign exchange).

The company said the first quarter of 2020 has started “satisfactorily” with expectations that, despite the impact of seasonal rains, it will meet its targeted production volumes for the quarter, which are significantly ahead of those achieved in Q1 2019.

Source: IDEX

Perth Mint highlights rare Argyle diamonds

The Perth Mint has released Jewelled Tiger coins featuring rare pink diamonds from Rio Tinto’s Argyle mine in Western Australia.

Its most significant release for 2020 incorporates nearly three carats of fancy vivid intense pink diamonds from the Argyle mine, making up a finely structured three-dimensional 18 carat rose gold tiger pavé.

Two emeralds from Colombia’s Muzo mines feature as the tiger’s eyes and the coin is crafted from 10 ounces of 99.99 per cent pure gold.

The Perth Mint only issued eight Jewelled Tiger coins, which are priced at $259,000 each, recognising the significance of the number eight in Asian cultures and its association with luck and prosperity.

Renowned for its power and beauty, the tiger shares the symbolic virtues of gold and so it was a natural choice to feature the revered creature on a sophisticated release, according to Perth Mint chief executive Richard Hayes.

“Our 2018 Jewelled Phoenix and 2019 Jewelled Dragon coins sold out within weeks of their respective release dates. We expect the Jewelled Tiger will be similarly sought-after among the world’s diamond connoisseurs and collectors of luxury items,” he said.

Each Jewelled Tiger coin is presented in a display case with 18 carat gold furnishings inset with two additional Argyle pink diamonds.

Source: australianmining