TORONTO (miningweekly.com) – Canada’s diamond output could more than double in the next four years, underpinned by De Beers Canada and Mountain Province Diamonds’ Gahcho Kué project, in Canada’s Northwest Territories, and Stornoway Diamond Corp’s Renard project, in Quebec – with both projects now in the construction phase – an independent industry analyst and consultant has said.
Paul Zimnisky on Tuesday said Canada currently accounted for about 14.2% of global diamond production in value, and 8.7% in carat volume. The two new mines, set to start production in 2016/17, would probably boost Canada's global market share to 25.2% in value, and 15.1% in volume by 2018.
This would give Canada the highest compound annual production growth rate – 20.2% in value and 17.4% in volume – among the world's top eight largest diamond-producing nations over the next four years.
In July, TSX-listed Stornoway completed a C$964-million financing package to fund construction of Renard. In September, Mountain Province closed a C$100-million equity financing and was in the final stages of arranging $370-million in debt to fund its portion of Gahcho Kué’s capital expenditure (capex).
Zimnisky pointed out that further to Gahcho Kué and Renard starting production in the next four years, another boost to Canadian output would come from TSX-listed Dominion Diamond Corp’s Ekati mine, in the Northwest Territories, where a new mine plan was expected to lift output, from 2.2-million carats a year, worth $630-million, to 5.9-million carats worth $1.2-billion by 2018. The main source of extra production would come from Ekati’s Misery pipe.
He noted that outside of Canada, there were only three other large-scale commercial mines scheduled to start operations within the next four years: Lace, Botuobinskaya and Bunder, all of which had yearly production profiles below that of both Gahcho Kué and Renard.
It was estimated that LSE-listed DiamondCorp’s fully financed Lace project, in South Africa, would produce up to 500 000 ct/y, with first run-of-mine (RoM) production slated for late next year. Laurelton Diamonds, a subsidiary of Tiffany & Co, had an offtake agreement in place for the project's proposed 30 years of production. Between 1901 and 1931, Lace had produced about 750 000 ct, until the Great Depression rendered the mine uneconomic.
Alrosa’s Botuobinskaya mine was nearing completion, with the first mining pencilled in for the middle of next year. The mine was estimated to produce 1.5-million carats a year in Russia’s Sakha region, of Northeastern Siberia, and had a resource of more than 70-million carats.
International diversified miner Rio Tinto’s Bunder project represented the first diamond discovery in India in 40 years. The mine could be in production by 2017, with an output profile of 700 000 ct/y, and a resource of 27-million carats.
LUKoil’s Grib mine, which started production this summer, and Alrosa’s Karpinskogo mine, which started production in October, were the first two non-alluvial diamond mines with yearly output of greater than one-million carats to be put into production since Canada’s Diavik mine went online back in 2003. Both mines were located in Russia, and had yearly production profiles of 4-million and 2.2-million carats respectively.
Zimnisky said that as Gahcho Kué and Renard were being built, some of the largest mines in the world were reaching depletion. In Botswana, Orapa and Jwaneng, arguably the world’s two most important diamond mines (mines with 50+ year lives), had less than 15 years of production left at current parameters.
In Australia, the Ellendale mine, which is the largest producer of fancy yellow diamonds in the world, was set to go on care and maintenance by year-end, as the mine’s economic ore has been exhausted.
At the alluvial Marange fields, in Zimbabwe, a site estimated to produce eight-million carats of diamonds this year, most of the easily accessible loose surface gravel had been mined, leaving hard conglomerate rock requiring additional capex to continue operations, an investment that most miners there had indicated they would not make, according to Zimnisky.