South African Diamonds Essay, Research Paper

South African Diamonds

South Africa is presently the universe & # 8217 ; s fifth largest manufacturer of natural diamonds. In 1995, some 9,8 million carats of unsmooth diamonds were produced. A high per centum of these diamonds was of treasure and near-gem quality.

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Diamonds occur in pipes and crevices of kimberlite, every bit good as in alluvial and marine sedimentations. Pipes of kimberlite are normally round in form, and go smaller with increasing deepness. The well-known Premier Pipe, at Cullinan in Gauteng, the largest in South Africa, covers an country of 54 hour angle.

Approximately one out of every 100 pipes can be economically mined. As the elements erode diamond-bearing pipes, the rocks are liberated from the kimberlite and transported over long distances. Such diamonds are transported in rivers and can be concentrated as alluvial sedimentations in river bottoms. This sort of sedimentation is found chiefly in the North-West, the northern Free State and the Northern Cape.

Diamonds transported by rivers enter the sea and are distributed along the shore by wave action to organize marine alluvial diamond sedimentations. These diamond sedimentations are restricted to the West seashore, in peculiar the coastline North and South of the Orange River oral cavity at Alexander Bay in the Northern Cape. Owing to enduring, most of these diamonds are typically of gemstone quality.

Diamond-mining operations in South Africa are dominated by De Beers Consolidated Mines, a company originally formed through the consolidation of the old Kimberley mines.

The former Kimberley mine, the Big Hole, has been declared a national memorial, and a museum picturing the history of diamond excavation in the state has been established near the site.

South Africa has an established diamond film editing industry. All unsmooth diamonds mined locally are first offered for sale to the cutting industry. Those rocks that can non be processed locally are available for export.

A new system was introduced in January 1993, whereby merely De Beers may export all of its diamonds. It so imports the same rocks which theoretically would hold been sold locally, plus extra unsmooth diamonds from other contracted non-South African diamond mines.

Overview

South Africa has been a major diamond manufacturer for over one hundred old ages during which clip De Beers, chiefly through its direction of the Central Selling Organisation, has established itself as the pre-eminent diamond excavation and selling company playing a cardinal function in the universe diamond industry. Most of the diamonds are mined offshore and onshore the West Coast of South Africa merely south of the Namibian boundary line.

South Africa is presently the world+s fifth-largest manufacturer of natural diamonds. In 1997, some 10 million carats of unsmooth diamonds were produced. A high per centum of these are of treasure and near-gem quality. Diamonds occur in pipes and crevices of kimberlite, every bit good as in alluvial and marine sedimentations. The well-known Premier Pipe, at Cullinan in Gauteng, the largest in South Africa, covers an country of 54 hectare.

De Beers and TransHex are South Africa & # 8217 ; s two largest manufacturers of diamonds. TransHex agreed in rule to unify with Ocean Diamond Mining in 1999, but this amalgamation failed to take topographic point.

Diamond Mining

South Africa & # 8217 ; s 1995 unsmooth diamond production was more than ten million carats, seting it 5th in the universe conference of manufacturers by weight, after Australia, the Democratic Republic of Congo, Botswana and Russia. De Beers mines accounted for 94 % of the twelvemonth & # 8217 ; s volume with 625 000 carats from other beginnings.

De Beers dominates the southern African diamond excavation concern. De Beers produced 9.4m carats from its SA mines during 1996. De Beers Marine produces about 480,000 carats yearly. The De Beers excavation composites are:

* Finsch mine in the Cape, the universe & # 8217 ; s most modern belowground diamond mine, which merged with the Kimberley and Koffiefontein mines to make a individual direction unit ;

* the Premier diamond mine, which has produced many of the universe & # 8217 ; s largest diamonds ;

* and Venetia, the most modern opencast mine in the industry, which contributes about half of all South African production.

The following largest South African diamond manufacturer is the TransHex group which produced 188,000 carats in the twelvemonth to March 1997 both from alluvial diamond operations along the south bank of the Orange river near to where it reaches the Atlantic at Oranjemund and seven offshore marine grants. Trans-Hex operates retreatment workss around the Bellsbank, Sover and Roberts Victor mines in the Kimberley country. Trans Hex has operations at Baken, So Ver, Reuning, Komaggas, and Hondeklip Bay and marine operations. Operation ceased at Dokolwayo, Bellsbank and New Elands during the 1997 fiscal twelvemonth. Exploration is underway at Reuning South, Nxodap, Bloeddrif and Hondeklip Bay and along the Orange River at Baken, where proven ore militias have been increased to eight and a half old ages at current production degrees. Trans-Hex sells its production outside the CSO through traders in Antwerp. Toronto listed subordinate Trans Hex International ( THI ) is involved in geographic expedition work in states including Namibia, Indonesia, Angola and Brazil.

Messina Diamond Corporation, listed on the Toronto Stock Exchange, produces about 50,000 carats / twelvemonth from operations near Star and Bellsbank which should increase one time the new Liqhobong mine in Lesotho starts production. Messina & # 8217 ; s one-year end product is forecast to lift to 400,000 carats in 1999 and 2 million carats by 2001.

Canadian excavation company Southern Era is developing an belowground diamond mine on the Klipspringer farm in Northern Province. More than 3000 carats, most of them gem quality, were recovered in preliminary diggings. The 62km long Kimberlite pipe is about six times longer than any other in South Africa. The capital cost of the belowground mine is estimated at $ US US 30 million. The company says it can keep production costs to below $ US US 25 a carat for up to 20 years.SouthernEra controls the Klipspringer undertaking. SouthernEra Resources acquired 100 % of the mineral rights on the farms Frankryk and Schietfontein, portion of the Klipspringer Project belongings retentions. The farms contain most of the delineated work stoppage tendency of the Sugarbird crevice and related constructions.

De Beers ( 60 % ) and SouthernEra Resources ( 40 % ) , which bought out spouse Randgold Exploration, are jointly developing the M1 diamond pipe on Marsfontein farm in Northern Province. The M1 pipe is little but contains a really high class of easy mined ore. The site is close toDe Beers & # 8217 ; bing mineral rights at Zebedall. De Beers will pay NGS Resources about R75 million for the excavation rights. Marsfontein ore will be processed at the SouthernEra & # 8217 ; s intervention works at Modderfontein. The Central Selling Organisation will purchase M1 and Klipspringer end product.

In February 1999 De Beers and SouthernEra signed elaborate understandings, in footings of which De Beers will pull off the undertaking, and SouthernEra is responsible for ore intervention at its works on the farm Rusland. In footings of the selling understandings, production from the Marsfontein undertaking and from the SouthernEra Klipspringer undertaking will be sold through the Central Selling Organisation ( CSO ) .

Mazal Mining, an geographic expedition and excavation company, has discovered what appears to be the 2nd largest diamond sedimentation in South Africa, and one which is potentially every bit rich as the original kimberlite I material which made Kimberley universe famous. Paardeberg E, 50km West of Kimberley, has already yielded a 2,8 carat diamond deserving $ 393 a carat, and its index minerals are consistent with a high value kimberlite pipe. The chief pipe has been estimated technically as being larger than 28ha, with the boundary still undetermined and old shafts in the country proposing a pipe larger than 28ha. Diamonds retrieved show that the kimberlite comprises 60 % treasure and 40 % industrial diamonds. There is an outlook of an eventual output of around 100 000 carats/y. At 28ha the pipe is 2nd merely to the 32,2ha Premier mine, South Africa & # 8217 ; s largest diamond mine. The big pipe gives rise to outlooks of unfastened opposing to 500m and 100 old ages of life of mine. Mazal hopes to reason a feasibleness survey by March 2000, when the company will get down excavation, every bit good as go oning geographic expedition in environing countries.

Other excavation companies include:

* Alexkor, a parastatal which mines South of the Orange River delta. The Nabera pool has been awarded a 2 twelvemonth direction contract over this operation, trusting to return it to profitableness and to increase the life of the mine. The mine has been running at a loss since 1996. One of the major jobs in the country is theft, with every bit many as 60 sydicates involved in diamond larceny operations in the country. Nabera plans to pass R120 million on geographic expedition during its 2 twelvemonth direction contract, as up to 70km of the 120km mine site has non been consistently worked on.

* AfriOre, a Canadian geographic expedition company.

* Ashton Mining, an Australian company.

* Penta Diamond Holdings has started mining operations near Lichtenberg.

* a figure of smaller companies, some listed, suc

H as Thabex, involved in geographic expedition and development of alluvial and crevice sedimentations in the Northern Cape, North West and Free State around towns like Theunissen, Bloemhof, Wolmaransstad and Barkly West.

* New Diamond Corporation ( Newco ) , a black authorization company founded in January 1999, and owned 51 % by De Beers.

Plans are under manner to return to production the ailment fated Free State Rovic diamond mine which collapsed under a mudslide. The mine is planned to bring forth about 3 million dozenss of kimberlite over the mine & # 8217 ; s life span.

International mobs runing out of Port Nolloth are estimated to hold smuggled out about R130 m worth of diamonds yearly from west seashore mines. Between 20 % and 40 % of Alexkor & # 8217 ; s entire turnover was smuggled from the mine and production was down to 30 % .

Alluvial Mining

As the elements erode diamond-bearing pipes, the rocks are liberated from the kimberlite and transported over long distances. Such diamonds are transported in rivers and can be concentrated as alluvial sedimentations in river bottoms. This sort of sedimentation is found chiefly in the North-West, the northern Free State and the Northern Cape.

Alluvial crushed rocks, widening from the Lichtenburg to Barkly West territories along the Orange and Vaal Rivers and on the Northern and Western Cape seashores, output diamonds normally of a better quality than those found in the original stone. The early diamond hastes at Hopetown and near Kimberley, were followed by a sequence of hastes to the alluvial diamond Fieldss 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 territory. Although there are still 1500 alluvial diggers in the North West, Northern Cape and Free State states, the chances for new labor-intensive small-scale diamond mines have been greatly reduced. The historical depletion of alluvial diamonds leaves merely the diamond-rich pipes which require deep excavation with all the capital and expertness that implies.

Australia & # 8217 ; s Moonstone Diamond Mining had unearthed 53 diamonds weighing more than five carats each, including one rock of 60 carats, at the Saxendrift alluvial undertaking on the Orange River in the Northern Cape state. Moonstone Mining has now been bought out by Benguela Concessions Ltd ( Benco ) .

Marine Mining

Diamonds transported by rivers enter the sea and are distributed along the shore by wave action to organize marine alluvial diamond sedimentations. These offshore and onshore alluvial diamond sedimentations are found along the Atlantic west seashore of South Africa and Namibia over a distance of some 1 500 kilometers.

Offshore diamond excavation in South Africa started in 1961. There may be every bit many as 1,5 billion carats of gem-quality diamonds off the Namibian and South African West seashores, likely the universe & # 8217 ; s largest known resource of high quality diamonds. To day of the month, combined sea and land production in South Africa and Namibia is estimated at around 180 million carats. Marine diamond excavation is get downing to gain its full potency as a major excavation industry, as technological progresss improve mining operations. Major jobs associated with the industry include technology and geological jobs associated with excavation from unsteady platforms.

In 1981 the 12 bing primary mineral rental retentions, or grant countries, were expanded to 20 grant countries changing in coastal extent from 15 to 30 kilometers. These 20 sea countries stretch from Alexander Bay in the North to Cape Columbine in the South. In 1983, each of these countries was in bend subdivided into three diamond excavation zones:

* shoal, ( & # 8217 ; a & # 8217 ; countries ) from 31,49 meters seaward of the low H2O grade to 1000 meters beyond the high H2O grade

* center, ( & # 8217 ; b & # 8217 ; countries ) a strip between four to six kilometers broad determined by fixed coordinates

* and deep, ( & # 8217 ; c & # 8217 ; countries ) a strip fixed by fixed coordinates.

The Government so re-allocated the grants. In 1995 an extra subdivision was made consisting extremist deep ( & # 8217 ; d ‘ ) countries, the country between the 200 meters depth line ( isobath ) and the 500 meters depth line. The & # 8216 ; c & # 8217 ; and & # 8216 ; d & # 8217 ; countries are mostly limited to major local and abroad companies. This is because of the H2O deepness and the hostile environment which requires important fiscal and technological resources. Medium-sized and smaller companies have by and large been more active in the & # 8216 ; a & # 8217 ; and & # 8216 ; b & # 8217 ; countries, where known and proven geographic expedition and excavation techniques can be applied.

Until 1996, the northern sea countries attracted the most attending, but in that twelvemonth companies became interested in the sea countries in the Cape Canyon part farther south. The whole country is ill-famed for its foul conditions which can sometimes do it impossible for diamond excavation ships to run. The attractive force is that the diamonds are all top-quality treasures worth on mean US $ 200 per carat. This sort of excavation has become possible due to modern technological progresss which make it possible to obtain dependable information about the geology of the ocean bed, the presence of diamond-bearing crushed rock and the extent of the militias. By October 1996, merely 9 vacant sea countries out of 74 remained.

The major participants are:

* De Beers Marine, the universe leader in off-shore diamond excavation geographic expedition engineering

* Ocean Diamond Mining ( ODM ) mines the Marine deposits off the West Coast where it has established itself as the taking deepsea operator after De Beers Marine, bring forthing 18 301 carats in the one-fourth stoping 30 June 1999.

* Benguela Concessions Ltd ( Benco ) was created with the acquisition of marine diamond grants on the Namaqualand seashore between Kleinzee and Port Nolloth, to which other grants have been added. Benco presently has involvements, or is actively involved, in 29 grants off the South African and Namibian coastline & # 8211 ; an country over 28 700-km2 in extent & # 8211 ; which may incorporate diamonds to the extent of 9.5-million carats. In 1998 Benco took over Australian listed junior excavation company Moonstone Diamond Corporation and their jointly owned diamond excavation vas, the Moonstar.

* Namibian Minerals Corporation ( Namco ) , a Canadian excavation company listed on the Namibian and Toronto stock exchanges

* and Diamond Fields International, a Canadian company

Diamond Cutting and Polishing

South Africa is the lone African state with an established diamond film editing industry.

All unsmooth diamonds mined locally are first offered for sale to the cutting industry. Those rocks that can non be processed locally are available for export. A new system was introduced in January 1993, whereby merely De Beers may export all of its diamonds. It so imports the same rocks which theoretically would hold been sold locally, plus extra unsmooth diamonds from other contracted non-South African diamond mines.

Since 1986, all South African manufacturers have had to offer economically chewable diamonds to local cutters or pay a 15 % export responsibility. South African mines are no longer major manufacturers of the sort of diamonds which are economically chewable in South Africa. In 1993, Section 59 of the 1986 Diamonds Act was changed to supply that supplies to South Africa could be provided from the CSO & # 8217 ; s world-sourced scope of diamonds in London. An luxuriant system, monitored by authorities judges through the South African Diamond Board, is designed to guarantee the system works swimmingly. Under the stewardship of the South African Diamond Board, production from De Beers mines is split at Harry Oppenheimer House in Kimberley into three:

1. South African ( the cutters assess them as suited for local shining ) ;

2. Conditional ( the cutters may wish to smooth them, capable to market conditions ) ;

3. and Unconditional ( deemed by the Diamond Board to be unsuitable for smoothing locally ) .

The South African class is less than 5 % by weight ; Conditional diamonds 10 % by weight and the Unconditional make up the balance of 85 % . South African rocks over 10,8 carats are reserved entirely for South African cutters, as are illusions, rocks of unusual and rare coloring material. South African cutters receive most of their unsmooth diamonds from the same providers. In 1994 they obtained merely 48 % of their supplies from the Central Selling Organisation, 33 % from foreign traders, 17 % from local manufacturers and traders and 2 % from other beginnings.

Approximately 80 % of diamonds polished locally are processed in Johannesburg, South Africa & # 8217 ; s chief diamond Centre. Diamonds are besides polished in Newcastle ( one medium sized mill ) , Kimberley, Cape Town, Durban and East London. Cuting mills that used to run in Bloemfontein and Pietersburg are no longer active. Employment in the local film editing industry declined from 5 000 in the eightiess to over 3 800 workers in 1989 to about 1 500 in 1995. The South African Diamond Workers Union ( SADWU ) attributes it besides to the universe recession in the diamond industry and the maltreatment of the old decentralization inducements. Harmonizing to Diamond Board estimates, the local film editing industry cut approximately 571 000 carats in 1995.

Morokweng, run by Mr MacDonald Temane, is the first black-owned diamond film editing and smoothing company in South Africa.

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