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Diamonds – Mining, Lab-Grown and Conflict/Blood

Diamond profit helps Anglo American amid commodities downturn – by Neil Hume and James Wilson (Financial Times – February 13, 2015)

http://www.ft.com/intl/companies/mining

Surging profit from diamonds last year brought some relief for Anglo American, which reported a $2.5bn net loss for 2014 after taking a large writedown on its flagship iron ore project.

Anglo on Friday reported a robust performance by De Beers, the diamond miner and marketing group that it bought in 2011, because of strong gem demand in the US and Asia.

By contrast the steep drop in the price of iron ore, used in steelmaking, led Anglo to take a $3.8bn pre-tax impairment in the value of Minas-Rio, a Brazilian project blighted by cost overruns and delays. The mine was the subject of $5bn of impairment charges in 2012.

Benchmark iron ore prices have halved over the past year, affecting Anglo’s anticipated earnings from Minas-Rio. The FTSE 100 group spent $5bn to buy the mine and almost $9bn to develop it, before starting to ship ore in October.

The problems at Minas-Rio contributed to a loss of confidence in Cynthia Carroll, Anglo’s previous chief executive. Anglo also wrote down the value of some coal projects within $4.2bn of impairments outlined at its 2014 results. The miner said underlying group earnings came to $4.9bn last year, down 25 per cent compared with 2013.

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Rio Tinto to spend at least $500 million to advance diamond project in India – by Cecilia Jamasmie (Mining.com – January 12, 2015)

http://www.mining.com/

Mining giant Rio Tinto (LON:RIO) plans to invest $500 million in its Bunder diamond mining project in the central Indian state of Madhya Pradesh, the firm boss Sam Walsh said Monday.

Speaking to reporters Walsh added the company is awaiting environmental clearances from Indian authorities to start mining, but didn’t say how soon he expected to receive such permits, Reuters reports.

Rio found the massive deposit in rural India, the most important diamond discovery in the country in the last 40 years, back in 2004. But it wasn’t until 2012 that it got an initial approval to develop the mining project, which is now just waiting for environment and forests clearances.

Rio Tinto Diamonds managing director Jean-Marc Lieberherr said last month the firm wanted to be the main player in the industry in India, driving the sector’s growth in years to come. The touted project is expected to generate about 30,000 jobs and produce up to three million carats a year, Rio has said.

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China challenges India’s polished diamond throne – by Tanya Ashreena (Reuters U.S. – December 25, 2015)

http://www.reuters.com/

NEW DELHI, Dec 26 (Reuters) – India’s long-held position as the world’s top diamond polisher is being challenged by soaring output from China, compelling the south Asian country to seek help from ally and top rough diamond supplier Russia to defend its market share.

India has traditionally relied on the middlemen in trading hubs of Antwerp, Tel Aviv and Dubai for its supply of rough diamonds, which mainly come from Russia or Africa. Most of the world’s diamond output is sent to India for cutting and polishing before being retailed around the world.

But China has managed to break the established trade route by getting diamonds directly from African mines in which Chinese companies have a stake. This has boosted the value of China’s net exports of polished diamonds by 72 percent in the past five years to $8.9 billion.

While India’s exports, supplied by firms such as Asian Star , Gitanjali Gems Ltd and Venus Jewel, rose 49 percent to $14 billion over that time, shipments have seen a sharp drop this year.

“China’s active procurement of rough supply from African countries was reducing the supply available to Indian manufacturers,” said Sandeep Varia, an executive of Indian industry body Assocham. “Many units across the country had to lay off workers due to losses.”

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Editorial: Top stories of 2014 – by John Cumming (Northern Miner – December 22, 2014)

The Northern Miner, first published in 1915, during the Cobalt Silver Rush, is considered Canada’s leading authority on the mining industry. Editor John Cumming MSc (Geol) is one of the country’s most well respected mining journalists.  jcumming@northernminer.com

Mining and mineral exploration are by nature businesses for optimists, but looking back over 2014, it’s hard not to conclude that difficulties and disasters tended to outweigh the brighter spots of achievement and growth. Here is our choice of the top stories of 2014:

10. Peter Munk’s exit — One of the giants of Canadian mining took his final bow in the mining world in April 2014, as Barrick Gold founder and chairman Peter Munk delivered his last address to shareholders at the company’s annual meeting. Having played a pivotal role in growing Barrick from modest beginnings to the world’s No. 1 gold producer, Munk’s reputation as a company builder is secured. As the year progressed, Barrick saw a major turnover in top management.

9. Rise of the house of Lundin — While other miners focused on cutbacks, the Lundin Group of Companies was a mine developer and bargain hunter. On top of financing numerous struggling juniors, the Lundin group piled up successes such as Lundin Mining’s start-up of its Eagle mine in Michigan and purchase of the Candelaria mine from Freeport-McMoRan; Fortress Minerals’ purchase of Kinross Gold’s Fruta del Norte project; and Lucara’s continued success in diamonds.

8. Crises in West Africa — A favourite destination for junior gold miners had a deadly year marked by an outbreak of Ebola that killed 7,300 people in Sierra Leone, Liberia and Guinea.

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Financing and marketing needed to spur diamond market growth – Bain – by David Brough (Reuters India – December 9, 2014)

http://in.reuters.com/

(Reuters) – Rising demand led by the United States and tighter supplies will boost the diamond market in coming years, but challenges to growth will include access to financing and the need for increased marketing, consultancy Bain said on Tuesday.

The diamond market grew by between 2 and 4 percent in 2013 at every point in the value chain, from mining to cutting and polishing, manufacturing and retail, Bain said.

“Looking ahead to the next decade, the outlook should remain strong, as long as the industry can step up its focus on driving demand and sustaining a positive image for the market,” it said in its fourth annual report on the global diamond industry.

Rising demand in the United States, the top retail market for diamond jewellery, followed by China and India, will drive the rebound of the market following a slowdown triggered by the 2008/9 global financial crisis.

“The economic peaks and valleys that the global diamond market experienced over the last few years are steady, at least for the time being, but the industry cannot afford to get too comfortable,” said Olya Linde, lead author and a Bain partner.

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Rio Tinto diamond bet adds sparkle to junior miners’ prospects – by Susan Taylor (Reuters U.S. – December 3, 2014)

http://www.reuters.com/

TORONTO – Dec 3 (Reuters) – Rio Tinto Plc’s re-commitment to diamonds with a $350 million Canadian mine expansion has highlighted the prospects for a handful of smaller players boasting one of the sector’s rarest commodities – new mines.

After two decades without a big discovery, the $18 billion diamond mining industry will need fresh resources to feed a growing consumer appetite for the elusive stone, industry forecasters predict.

They say demand has been boosted by marketing aimed at convincing couples in China and India that diamonds are forever and single women to treat themselves to a right-hand ring.

Global consumer demand for diamond jewelry is forecast to grow at 4 to 5 percent annually, to $31 billion in 2018 from $25 billion last year, Anglo American Plc-owned De Beers said in a presentation last month.

De Beers, the world’s biggest diamond producer by market value, has also said it expects global supply to decline after 2020, with demand outstripping supply in the next 10 years.

BMO Research forecasts rough diamond prices will increase 5-7 percent annually from 2015 through 2017, helped by solid retail sales.

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Rio Invests $350 Million in Diamond Project After Walsh Backing – by David Stringer (Blomberg News – November 26, 2014)

http://www.bloomberg.com/

Rio Tinto Group (RIO), the world’s second biggest mining company, approved a $350 million project to expand a diamond mine in northwestern Canada, weeks after Chief Executive Officer Sam Walsh flagged an investment.

Construction of the A21 kimberlite pipe at the Diavik mine, 220 kilometers (140 miles) south of the Arctic Circle, will start next year, London-based Rio Tinto said today in a statement. Rio owns 60 percent of the mine, with Dominion Diamond Corp. (DDC) holding the remainder.

The investment comes after Walsh said in an interview this month that there were “seriously good” opportunities in diamonds, a unit that had been put up for sale by former CEO Tom Albanese. Demand globally will probably rise 4 percent to 4.5 percent this year with U.S. consumption increasing as much as 6 percent, according to De Beers, the biggest producer.

“I love diamonds,” Walsh said in an interview on Nov. 10 with Bloomberg Television in Beijing, when he flagged an expansion at its Canadian diamond operation. “I think it’s a seriously good business.”

Production from the pipe is expected to start from late 2018. The expansion will ensure output at Diavik continues at existing levels, Rio Tinto said. The mine’s current production plan has output continuing until 2023, it said.

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Central African Republic new ‘blood diamond’ hub – by Martin Creamer (MiningWeekly.com – November 18, 2014)

http://www.miningweekly.com/page/americas-home

JOHANNESBURG (miningweekly.com) – The dysfunctional Central African Republic (CAR) has taken over as the country where “blood diamond” activity is again rife.

Diamonds worth $24-million have been smuggled out of CAR since the suspension of the Kimberley Process last year and Seleka rebels and “anti-balaka” militia are providing security to local diamond traders, who initially pay the warring groups for safe access to diamond fields and then for ongoing protection during mining.

“It’s a classical case of blood diamonds,” International Crisis Group project director Thierry Vircoulon told Mining Weekly Online in the attached video.

Belgian authorities earlier this year confiscated diamonds ostensibly smuggled through the Democratic Republic of Congo (DRC) and Dubai to Europe from the ungoverned CAR, which is currently hobbling along as an impoverished failed State.

The chairperson of the Kimberley Process has put in a written request to the United Nations Security Council to alert neighbouring countries to the presence of diamond contraband.

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Botswana: Diamonds Cannot Solely Sustain Botswana – by (All Africa.com – November 16, 2014)

http://allafrica.com/

Gaborone — President Lt Gen. Seretse Khama Ian Khama says diamonds alone cannot carry Botswana forward.

Delivering his 2014 State-of-the Nation Address on Thursday, November 13, President Khama said to achieve greater economic diversification, the country should continue promoting further beneficiation within the minerals sector.

He said growing global demand for gem diamonds had dovetailed with upward estimates of domestic production based on both the ongoing and anticipated opening of new mines and an extension in the life spans of existing mines through new recovery methods.

Together, he said these developments should ensure that “we will remain a leading global producer over the next three decades until at least 2050.”

With the successful migration of the De Beers Global Sight-holder Sales from London to Gaborone, which was completed ahead of schedule, he said Botswana was already realising its goal of becoming a global ‘mines to market’ hub in the case of diamonds.

To date, he said ten sight-holder sales had been successfully held in Botswana, after the first round of local Diamond Trading Company (DTC) sales that took place in November 2013.

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Botswana, Africa’s diamond, risks losing its sparkle – by Tiisetso Motsoeneng and Joe Brock (Globe and Mail – October 27, 2014)

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

Reuters – When environmental scientist Bakang Bogopa graduated first in his class from the University of Botswana two years ago he did not expect that his first job would be moving furniture or that he would still be living off handouts from his mother.

Bogopa, who studied on a government scholarship, is among thousands of unemployed graduates in Botswana who exemplify both the country’s swift economic progress in the five decades since independence from Britain, and the challenges it now faces.

One of the world’s poorest countries in the 1970s, Botswana transformed into one of its fastest-growing economies by harnessing around $3-billion a year in diamond sales, to become the world’s biggest producer, and gained middle-income status.

The landlocked country of just two million has also been heralded as a beacon for African democracy, avoiding the conflict and corruption that has ravaged resource-rich countries across the continent.

But dependence on its wealth from the diamond industry is catching up with the southern African country.

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BHP Billiton to pursue demerger with no share listing in Canada – by Barry Critchley (National Post – October 22, 2014)

The National Post is Canada’s second largest national paper.

For the second time in four years, BHP Billiton Ltd., the world’s largest mining company — which holds its annual meeting in London Thursday — has announced plans that don’t include a Canadian share listing.

In the summer of 2010, BHP Billiton – the result of the 2001 merger between BHP and Billiton – launched a hostile bid for Potash Corporation of Saskatchewan Inc. It offered US$130 cash a share — a potential US$40-billion transaction.

At the time, BHP Billiton noted it had business interests in Canada dating back almost 40 years.

The most significant interest was EKATI, a diamond mine in which it had invested about US$5-billion since production began in 1998. BHP, which sold the EKATI mine in 2012, had also acquired exploration rights in potash, notably the Jansen mine.

But, perhaps as a reflection of the takeover consideration, BHP Billiton, which at the time had a market cap of US$188-billion, made no plans to list its shares on the TSX. However, late in the game when opposition to its takeover was mounting, it offered a secondary listing on the TSX to complement listings Australia, London, Johannesburg and New York. But its TSX-listing plans were shelved when the takeover was withdrawn after Ottawa nixed the deal after applying the net benefit test.

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Canadian Diamond Production Estimated to More than Double in Next 4 Years – by Paul Zimnisky (Analyzing Trends in the Global Diamond Industry – October 14, 2014)

http://www.paulzimnisky.com/

With Gahcho Kué and Renard now officially in construction phase, I think it’s fair to say that in 4 years time Canadian diamond production will look significantly different than it does today.

In July, Stornoway Diamonds (TSX: SWY) completed a C$964 million financing package to fund construction of Renard. In September, Mountain Province Diamonds (TSX: MPV) closed a C$100 million equity financing and is in the final stages of arranging US$370 million in debt to fund its portion of Gahcho Kué’s capital expenditure.

Canada currently represents an estimated 14.2% of the world diamond production in value, and 8.7% in carat volume. The two new mines, set to commence production in 2016/2017, are estimated to boost Canada’s global market share to 25.2% in value, and 15.1% in volume by 2018, which would give Canada the highest compound annual growth rate of production (20.2% in value and 17.4% in volume) among the worlds 8 largest diamond producing nations over the next 4 years.

Outside of Canada, there are only 3 other large-scale commercial mines scheduled to commence operations within the next 4 years: Lace, Botuobinskaya, and Bunder, all of which have annual production profiles that are below that of both Gahcho Kué and Renard.

DiamondCorp’s (LSE: DCP) fully financed Lace project in South Africa is estimated to produce up to 500,000 carats annually, with first ROM production slated for late next year.

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Diamond crunch: Exploration dries up – by Thomas Biesheuvel (Mineweb.com – October 3, 2014)

http://www.mineweb.com/

“You need deep pockets to find kimberlites,” one expert notes. Meanwhile money, efforts have dried up.

(BLOOMBERG) – Diamonds are so hard to find that explorers have pretty much given up trying.

More than $7 billion has been plowed into the hunt for the gem since 2000, according to top supplier De Beers, and the results have been meager, with no major finds. That’s led producers including BHP Billiton Ltd. to pack up their maps and drills and head for home. The amount spent looking for diamond- rich kimberlite formations underground has dropped by half since 2007, when exploration investment topped $1 billion.

The dearth of new projects is putting pressure on an industry where supplies of accessible diamonds near the surface are depleted and the cost of going deeper is rising. De Beers opened the Orapa mine in Botswana in 1971 and its Jwaneng project, the world’s largest diamond mine by production value, in 1982. Botswana, the top producer, saw output drop to 22.7 million carats last year from 33.6 million carats in 2007.

“The odds of finding an economic kimberlite are extremely against you,” said Johan Dippenaar, chief executive officer of Petra Diamonds Ltd., which spent just $2.1 million looking for new mines last year and has abandoned prospective projects in Angola and Sierra Leone. “Exploration, for the foreseeable future, will remain something that we will be involved in, but it won’t command very much of our cash flows.”

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Mining News: Incentives spur exploration projects – by Rose Ragsdale (Mining News – Week of September 28, 2014)

http://www.petroleumnews.com/miningnewsnorth/index.shtml

Inaugural program aims to encourage existing, would-be mineral explorers to chase diamonds, gold and other metals in the North

The Government of Northwest Territories has implemented a new Mining Incentive Program that was oversubscribed by midyear, with strong interest shown by companies and prospectors in the Northwest Territories and across Canada.

“The Mining Incentive Program helps our government support those with the energy, expertise and perseverance that this industry relies on to conduct mineral exploration in an environmentally sustainable way,” said GNWT Industry, Tourism and Investment Minister David Ramsay.

“I especially look forward to using this program to contribute to the success of northern and Aboriginal-owned businesses pursuing mining projects, so more northerners can enjoy the benefits of economic development and a healthy mining sector,” Ramsay said in a statement.

“It’s very positive to get that much interest,” said Pam Strand, director of Mineral Resources for the Government of Northwest Territories. “But it’s not surprising when compared with other jurisdictions such as Yukon Territory and Manitoba. Their programs have grown year by year.”

Yukon Territory, for example, awarded C$1.4 million this year to 44 companies and prospectors, up about C$630,000 from comparable funding in 2013.

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New wave of diamond fever sweeps Northwest Territories; Prima Diamonds lands prime real estate (Mining and Exploration – September 2014)

http://www.miningandexploration.ca/

Diamond deposits, in the words of one senior geologist, are like pigeons. Where you find one, you’re likely to find an entire flock.

That’s the guiding logic behind a new wave of diamond mine development and claim staking in the Slave Craton in Northwest Territories. The NWT already serves as host to some of the world’s richest diamond mines, starting with Ekati and Diavik, followed by Snap Lake, all in the central corridor of the Slave Craton.

Next to follow is the Gahcho Kué Diamond Project southeast of the prolific Ekati and Diavik diamond mines. When it begins production in 2016, Gahcho Kué is reputed to become one of the largest and richest new diamond mines in the world. This $700 million project has a combined probable mineral reserve estimated at 55.5 million contained carats. De Beers Canada owns 51 per cent of Gahcho Kué and is the operator of the proposed mine. Mountain Province Diamonds, which discovered the Gahcho Kué diamond resource, owns 49 per cent.

Next to Gahcho Kué is the Kennady North Project with four confirmed diamond pipes. Two of the pipes returned diamond sample grades two to three times greater per tonne than Gahcho Kué, as reported by the company.

Circling in the vicinity of Gahcho Kué are projects led by successful veterans of the original 1990’s Canadian diamond rush: Randy Turner, CEO of Canterra Minerals; Buddy Doyle, exploration director and vice-president of Margaret Lake; and Patrick Evans, president and CEO of Kennady Diamonds.

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