Overview
South Africa has the most diverse range of diamond deposits in the world. Deposits include open pit and underground kimberlite pipe/dyke/fissure mining, alluvial mining as well as on and offshore marine mining. South Africa’s diamond industry produces a stable 10 Mct annually of which 90% is exported. South Africa produces 9% of global production and is ranked 4th in the world in terms of rough diamond production. The industry employs some 14 500 people. In 2003 South Africa’s diamond production reached an estimated 12.5 million carats caompared with 11.2 million carats in 2002 (worth an estimated $900).
Most production is sourced from kimberlite mines (9 Mct), followed by alluvials (920 000ct) and then marine (64 000 ct). South Africa’s kimberlite mines are located mainly in the central northern parts of the country. Over the last 100 million years most kimberlites have had a significant amount of erosion taking place, resulting in several billion carats being eroded and transported fluvially. This has resulted in numerous alluvial diamond deposits along the Orange and Vaal rivers. Finally, ancient beach terraces and marine deposits located along the west coast constitute an enormous resource.
De Beers Investments is the leading diamond mining company in South Africa, followed by Trans Hex and Southern Era. Smaller operators include Rex Diamonds, Firestone Diamonds, Trivalence Mining Corporation, Majestic Resources, Caussa Capital Corporation, Mountain Lake Resources and Petra Diamonds.
Following changes in South Africa’s Minerals Bill, several of South Africa’s larger companies are being forced to relinquish prospective properties (“use it or lose it” principle). As a result, this has provided excellent incentives and entry points for foreign investment and black empowerment mining companies in particular, as this aspect forms one of the cornerstones for the new Minerals Bills.
Most of De Beers’’ exploration expenditure is now outside of South Africa and moving more into Canada, Botswana and India. De Beers, is however, engaged in an expansion programme of its South African mines in an attempt to increase production to 12 Mct from 10 Mct. Most of the planned increase will come from its Venetia mine which provides almost half of the company’s South African output. Additional production will come from optimising operations at the company’s mines in Namaqualand and the Premier mine in Pretoria.
New Diamond Corp, a black empowerment firm has acquired De Beers Kamferdam mine in Kimberley with the intention of restarting operations. Mvelaphanda Resources has also increased its interest in the Trans Hex Group to 19.4%.
Kimberlite diamond mining
Most of South Africa’s kimberlite mines are operated by De Beers, with smaller producers in Southern Era, Trivalence Mining Corporation and Rex Diamonds.
De Beers is the world’s largest producer of gem quality diamonds, producing around 50% of world production. It is the leader in diamond mining and recovery technology and currently produces 93% of South Africa’s diamonds from its numerous large and small diamond mining operations which cover every category of mine – open pit, under- ground, alluvial, coastal and undersea. The Venetia mine situated in the Northern Province produces nearly 50% of South Africa’s total production. In 2003 the mine reduced output from 1.47 Mct in 2002 to 1.27 Mct in 2003. Some of the largest diamonds have been recovered from the Premier Mine in Gauteng (1.8 Mct in 2000). De Beers is considering a $630 million expansion at Premier that will take operations underground to a depth of over 1000m. The expansion will extend the life of mine and increase production to 5 Mct per year by 2009, making it South Africa’s largest volume producing diamond mine.
Other kimberlite operations include the underground Finsch mine (1.94 Mct in 2003), the Kimberley Mines (comprising Bultfontein, Dutoitspan and Wesselton), Koffiefontein and 60% of the Marsfontein Mine. De Beers also operates The Oaks, a small kimberlite operation located in the Northern Province.
De Beers has reached several agreements with black empowerment mining companies, including Mvelaphanda Resources as well as the New Diamond Company. With Mvelaphanda, De Beers has signed an exploration agreement over certain of its properties located in South Africa’s Limpopo Province (previously known as the Northern Province). With New Diamond Corp, De Beers has sold its mothballed Kamfersdam kimberlite mine for $3.5 million. NDC plan to redevelop the mine that has an estimated resource containing 1.7 Mct. Production is expected in 2004.
Canadian Southern Era made a rapid and public entry into the South African diamond scene with the establishment of the Klipspringer Mine, located near Potgietersrus in the Northern Province. After a protracted mineral rights battle with landowners and De Beers, Southern Era ended up owning 40% of the Marsfontein property, which hosts the M1 pipe.
The Marsfontein M1 Pipe continues to be mined, with grades declining with depth. Current grades are estimated at 173 carats per hundred tons (cpht). Production will continue for some time following the processing of stockpile material as well as attempts at locating additional diamondiferous gravel resources. The adjoining Klipspringer mine has a extractable reserves of 3.6 Mt grading at an average of 47 cpht. In order to raise finance for the mine, Southern Era have made an agreement with black empowerment vehicle Steppon Investments that will see Southern Era become 50% shareholders of Marsfontein, up from its previous 40%. This will make Southern Era the majority shareholder of all assets to be called the Klipspringer Joint Venture. The Klipspringer mine is expected to begin production in mid 2003, producing 150 000 ct/year.
Mazal Mining, an exploration and mining company, has discovered what appears to be the second largest diamond deposit in South Africa. The MK1 pipe located at Paardeberg east, 50km west of Kimberley, has already yielded a 2,8-carat diamond worth $393 a carat, and its indicator minerals are consistent with a high value kimberlite pipe. The main pipe has been estimated technically as being larger than 28ha, with the boundary still undetermined and old shafts in the area suggesting a pipe larger than 28ha. Diamonds retrieved show that the kimberlite comprises 60% gem and 40% industrial diamonds. Bulk sampling of the pipe has already yielded 3200 carats averaging $150/carat and has a proven resource of 6.4 Mt grading 0.1 ct/t. Mazal also has other ground holdings totaling 20 000ha located in Namaqualand and close to existing alluvial operations and resources.
Trivalence Mining Corporation are developing its wholly owned Palmietgat property located north of Pretoria. Previously worked on by De Beers in the early 80’s, Palmietgat comprises of six kimberlites that are marginally diamondiferous. Trivalence has begun exploitation of the K14W kimberlite pipe, the first of three pipes to be mined over the next five years. K14W is estimated to have a grade at 76 cpht (carats per hundred tons). Production is earmarked to reach 200 000 ct per year from Palmietgat.
Vaaldiam Resources, along with Southern Era are evaluating the Mooikloof property located just west of De Beers’ The Oaks kimberlite close to the South Africa/Botswana border. The Mooikloof kimberlite was previously discovered by De Beers, but the potential for further kimberlite discoveries appear strong, based on previous sample recoveries.
Rex Diamonds operate three small kimberlite fissure mines in the Northern Cape and Free State provinces, the Ardo, Bellsbank and Rex mines. Collectively, these mines have estimated proven and probable reserves of 4.9 Mt containing 865 000 ct. Bellsbank produced 12 400 ct whilst Loxton produced 10 300 ct for a total of 22 771 ct in 2001. Following flooding, production at Bellsbank has been suspended with processing of tailings continuing whilst an exploration and development program is undertaken. Rex has now placed emphasis on the development of its Loxton Mine, in particular the Ardo and Du Plessis shafts.
Tawana Resources are making progress over the evaluation of the Perdevlei prospect located a mere 25km from the Finsch Diamond mine. Tawana are evaluting the K1 and K2 kimberlite pipes to a depth of 300m. Initial resource estimates for the pipes total 8.7Mt of ore grading at approximately 15 – 25 cpht. Bulk sampling of the Perdevlei K1 kimberlite has commenced with a 2000 t bulk sample being taken from 40m below the upper calcretised kimberlite, where recoveries are poor.
King’s Minerals have begun to evaluate their Wimbledon prospect, located north of Kimberley. This follows the discovery of kimberlite below historical dolomite workings, originally discovered by a local farmer. The company intends taking separate bulk samples in order to evaluate the mineralisation and grade of the kimberlite. Kings’ also has several shallow marine concessions located near Kleinsee, along the West Coast of South Africa.
Australian Majestic Resources, initially a focused alluvial explorer and producer are evaluating the purchase of the Messina Kimberlite Mine located near Kimberley. Messina produces approximately 20 000 ct each year and Majestic hopes to extend the life of mine to ten years following additional studies.
Marine diamond mining
Significant advances in surveying, sampling and recovery techniques have made the extensive marine deposits accessible. Although the sizes of these diamonds are generally smaller than diamonds produced inland, the quality is unsurpassed. The West Coast has been divided into 20 primary mining concessions, ranging from the mouth of the Orange River down to Cape Columbine in the south. The concession areas are arranged in numbered 30km wide coastal perpendicular strips. Each strip is sub divided into four zones
The “a” concession (31.49m seaward of the low water mark to 1000m beyond the high water mark,
The “b” concession (ranging between 4 – 6km, based on fixed co ordinates),
The “c” concession (stretching as far as the 200m isobath) and the
“d” concession (as deep as the 500m isobath).
The ‘c’ and ‘d’ areas are largely limited to major local and overseas companies. This is because of the water depth and the hostile environment that requires significant financial and technological resources. Medium-sized and smaller companies have generally been more active in the ‘a’ and ‘b’ areas, where known and proven exploration and mining techniques can be applied.
Until 1996, the northern concession areas attracted the most attention, but in that year companies became interested in the sea areas in the Cape Canyon region further south. The whole area is notorious for its foul weather, which can sometimes make it impossible for diamond mining ships to operate. This kind of mining has become possible due to modern technological advances which make it possible to obtain reliable information about the geology of the ocean bed, the presence of diamond-bearing gravel and the extent of the reserves. De Beers, Namco and Trans Hex have acquired most of the available sea concessions.
De Beers has extensive marine operations off the West Coast of South Africa, south of Port Nolloth. Here ancient marine terraces are mined at the Namaqualand operations (809 000 ct in 2000). De Beers’ deepsea operations are operated by De Beers Marine, who are currently focused on offshore Namibia, where the majority of its fleet is working for Namdeb (Namibian subsidiary of De Beers).
However, with the advent of new mining legislation (the proposed use it or lose it principal), many of the traditional holders of ground along the West Coast may be forced to relinquish all or parts of their concessions. Here, the newly formed Namakwa Diamond Company has been formed to evaluate marine deposits located along the Olifants River, a mere 350km north of Cape Town. This ground was relinquished by De Beers and has identified an inferred resource of up to 20 Mton tonnes grading 0.1 – 0.2 carats per ton.
South African listed Gilboa Properties have rights to the Namagroen marine concessions (8a, 9a and 8b) and have begun marine mining over targetted areas in the Namagroen licenses that has historically produced high quality stones. Gilboa has calcualted a total resource of 1.98 Mct over concessions 8a and 9a.
Kings Minerals has acquired several shallow marine concessions off the West Coast, including the 3(b), 5(a) and 6(a) concession located off Kleinsee.
Major Namibian producer, Namco has reviewed its holdings off South African waters and has decided to relinquish its deeper water concessions (d concession) to the South African Government whilst focusing on its shallower concessions (less than 100m water depth). Namco’s South African marine concessions now total 18 000 km2.
The parastatal diamond producer Alexkor, located at the mouth of the Orange River plans to be privatised by the government. The mine has been currently been managed by interim manager’s Mintek. The government intends selling its stake in Alexkor, with 10% remaining for the local Namakwa community.
Alluvial Diamond Mining
Alluvial gravels, extending from the Lichtenburg to Barkly West districts along the Orange and Vaal Rivers and on the Northern and Western Cape coasts, yield diamonds commonly of a better quality than those found in the original kimberlite. The early diamond rushes at Hopetown and near Kimberley, were followed by a succession of rushes to the alluvial diamond fields of the Northern Cape and what is now the North West Province. Examples were those in the 1920s and 1930s at Lichtenburg, Bakerville and the Mafikeng district. Although there are still 1500 alluvial diggers in the North West, Northern Cape and Free State provinces, the prospects for new labour-intensive small-scale diamond mines have been greatly reduced.
Trans Hex is South Africa’s second largest diamond producer, after De Beers, producing approximately 131 000 carats for the 2000/01 financial year. Trans Hex currently has several large-scale alluvial operations along the Orange River, along the border with Namibia. Here, Trans Hex has a 52km stretch of ground covering some 40 000 hectares. This area includes the Baken Mine, which is Trans Hex’s main producer, the Reuning – Jakkalsberg mines as well as the new Bloedrif mine located on a palaeo channel of the Orange River. The Baken Mine produces provides approximately 60% of Trans Hex’s earnings, whilst the nearby Reuning – Jakkalsberg divisions are smaller producers. Baken is expected to produce 60 000 carats per year. The acquisition of marine diamond mining company Benco as well as Mvelaphanda Holdings’ Gem Diamonds has added additional resources to Trans Hex. Benco has access to several shallow marine deposits along the West Coast whilst Gem Diamonds operated the Saxendrift (producing approximately 11 000 carats per year) mine located in the Northern Cape, near Douglas. As a result of the acquisition, Mvelaphanda Diamonds (South Africa’s leading black empowerment resource company) has obtained a significant shareholding in Trans Hex.
UK based Firestone diamonds are considering re opening the Ocna diamond mine on the Orange River.
Etruscan Resources and Mountain Lake Resources have completed feasibility studies over several alluvial deposits in the Ventersdorp region. Here, the Tirisano Diamond property has an estimated resource containing 8.2 million cubic meters averaging 2.9 carats per 100 cubic meters. Following the completion of a feasibility study, the partners have successfully completed the development, with production starting in late 2002. An annual production of 19 000 carats are envisaged at full capacity.
Global Diamond Resources operate the Grasdrif and Caerwinning alluvial deposits as well as have an option on the Montrose kimberlite pipe located near Pretoria. The Grasdrif prospect is located on the Orange River, along the border with Namibia in the Northern Cape. Caerwinning is located near Kimberley. Production in 2000 from Caerwinning were lower due to thicker overburden with the operation producing 7 500 carats and Grasdrif managing 1400 carats. Resources at Grasdrif are estimated to contain 82 Mt of diamondiferous gravel that is expected to yield more than 1 million carats.
Australian listed Majestic Resources rapidly positioned themselves as one of the country’s largest alluvial producers through the acquisition of the 25 000 ha property, called Pniel Estate. Pniel Estate has already produced a 30ct diamond, representing one of the largest finds by a foreign company in South Africa. Despite such finds, Majestic have decided to cease operations at Pniel, stating that the resource estimate for the property had been too poorly evaluated. Majestic had aimed to produce more than 50 000 ct/year by the end of 2001 from Pniel Estate as well as its Schutsekama and two Douglas properties. The Riet River mine (previously known as Schutsekama) began production in November 2000, and aims to produce between 8 – 10 000 ct per year. Production at the $2 million operation has started off well with the discovery of an 83 ct diamond, followed by a larger 123 ct stone. Furthermore, a 53.5 ct stone was recovered in early Feb 2002 by Majestic from Riet River.
Majestic Resources also evaluated the Orange River property that is located next to Trans Hex’s producing Saxendrift that produced a 213 ct stone in 2000. Despite its proximty to Saxendrift, Majestic decided against exploiting the Orange River resource based on poor sampling results. Majestic has several other properties that it is currently assessing, including the Vaal River Project (near Bloemhof, north of Kimberley), the Kannikwa project (located near Port Nolloth on the West Coast), as well as smaller alluvial projects near Christiana and Douglas in the Northen Cape. The option that Majestic had over the So Ver Kimberlite Tailings Project has lapsed, as the due diligence study failed to identify a significant resource base. Majestic have now moved into kimberlite mining through the acquisition of the 20 000 ct/year Messina Mine.
Australian Synergy Metals ahave begun exploiting an alluvial resource located near Bloemhof in the NorthWest Province. A resource containing over 18 Mt of gravel have been outlined for two deposits, Kareefontein and Gansvley.
Monroe Minerals have identified a diamondiferous gravel resource at its London Prospect located in the Schweizer Reneke District of South Africa’s North West Province. Initial studies suggest annual production of around 8 000 ct/year at an average price of $ 450/ct.
Organisations (73)
Diamond Core Resources Ltd, Good hope Diamonds (Kimberley) Ltd, African Gem Resources Ltd, African Star Minerals, Alexkor Limited, Benguela Concessions Ltd, Brakfontein Diamante, Caerwinning Diamond Mine, Carrig Diamonds Ltd, Central Selling Organisation, Circle Three (Pty) Ltd, Cygnus Corporation (Pty) Ltd, De Beers Centenary, De Beers Consolidated Mines, De Beers Group SA, De Beers Investments, De Beers Marine (Pty) Ltd, DebTech, Diamond SA-Monnickendam Ltd, Domba Mining ::[ View All ]
Facilities (246)
Afrikaner Lease, Agnes, Alpha Anthracite, Amandelbult, Arnot Colliery, Arthur Taylor Colliery, Arthur Taylor Opencast Mine (ATCOM), Atok, Avontuur, Bafokeng North, Bafokeng Rasimone, Baken, Balgarthan Colliery, Bambanani, Bank, Bankfontein Opencast, Barbrook, Beatrix, Beeshoek, Bellsbank :[ View All ]
Participating Organisations
Anglo American plc
Caussa Capital Corporation
Caussa owns a 100% interest in the prospecting and mining rights to the Witkrans diamond property located approximately 130 kilometres west of Johannesburg and 30 kilometres northwest of the town of Ventersdorp, Northwest Province.
De Beers Investments
De Beers operates several opencast, underground, alluvial and marine mines throughout South Africa. Opencast and underground kimberlite mines: Koffiefontein, Finsch, Kimberley, Premier and Venetia. Marine beach terrace and marine mining operations: Namaqualand and De Beers Marine’s offshore concessions.
Firestone Diamonds Plc
Global Diamond Resources Inc.
Global Diamond Resources has a 100% interest in two alluvial deposits (Grasdrif and Caerwinning) and an option to acquire a diamondiferous kimberlite pipe (Montrose) in South Africa.
Majestic Resources NL
Majestic Resources operate the Pniel Estate and Riet River alluvial mines near Kimberley.
Rex Diamond Mining Corporation
Southern Platinum Corp
Southern Era has interests in two diamond mining properties, Marsfontein (40% interest) and Klipspringer – wholly owned. Both mines are located in the Northern Province near Potgietersrus. Southern Era are also active ly involved in exploration activities in South Africa.
Trans Hex Group Ltd
Trans Hex has several land based alluvial as well as offshore marine diamond producers in South Africa.
Trivalence Mining Corporation of Canada
Trivalence operates the Palmietgat diamond mine.
