De Beers expands pilot scheme in Sierra Leone to sell ethically sourced diamonds

Anglo American’s De Beers is stepping up efforts to remove so-called “conflict” diamonds from the market by expanding a pilot program in Sierra Leone, which is set to help trace the route of precious stones dug up there by small miners.

The world’s largest rough diamond producer by value said Wednesday the decision to scale up its GemFair trial was made to give more artisanal and small-scale miners (ASM) the opportunity to benefit from the program.

After training ASM in 16 mine sites across Sierra Leone on how to use provided tablets to digitally track their diamonds throughout the supply chain, De Beers has extended the pilot to work with a further 38 sites and widen its impact, it said in the statement.

De Beers' GemFair program gives small miners an app and dedicated tablet as well as a diamond “toolkit” that enables the digital tracking of diamonds throughout the supply chain. 

The company has also partnered with the Diamond Development Initiative (DDI), an NGO in helping to formalize the diamond ASM sector in Africa.

De Beers’ plan to encourage mine owners to join GemFair is based on a membership model whereby mine sites that meet a strict set of core requirements, aligned with the OECD’s standards can join the program sell diamonds to GemFair.

Miners then work with DDI towards achieving full Maendeleo Diamond Standards (MDS) certification, within a one-year timeframe, De Beers said.

“While registered miners have no obligation to accept offers to purchase diamonds through the GemFair buying office, they are provided with free training in diamond valuation, so they can make an informed assessment about the value of their diamonds and negotiate the best possible deal,” it added.

Since the launch in April 2018, GemFair has seen significant progress across its operations, opening offices in both Koidu and Freetown, and developing a set of publicly available ASM standards to ensure a best practice approach for responsible sourcing.

The program has developed a digital solution to ensure the traceability of all diamonds mined by members. The toolkit contains an application and dedicated tablet that creates a digital record of each diamond found using GPS locations and QR-codes.

Tainted reputation

Artisanal mining accounts for only 20% of global diamond production, but carries a tainted reputation that’s damaged consumer confidence for almost 20 years.

Between 1991 and 2002, the district of Kono, in Sierra Leone, was at the centre of the "blood diamond" trade that funded the country’s brutal civil war as rebel groups exchanged gems for weapons.

Despite the establishment of the Kimberley Process in 2003, aimed at removing from the supply chain the now called "conflict diamonds" (those mined in an area of armed conflict and traded illicitly to finance the fighting), experts say trafficking of precious rocks is still ongoing.

According to Canada-based Centre for Research on Globalization (CRG) about one-fifth of diamonds on the global market in value terms are still a significant source of funding for regimes accused of committing crimes and human rights violations.

De Beers sells its diamonds mostly to authorized buyers at a series of so-called “sights” in Botswana, Namibia and South Africa. Then, they are normally sent to be polished or cut before ending up with retailers.

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Alrosa recovers large diamond from International pipe

Alrosa's (MCX:ALRS) International mine produced this month the largest gem-quality diamond seen in the past two years.

In a press release, the world's top diamond miner by output revealed that the stone weighs 118.91 carats, displays a light yellow overblown, has salient edges, one of them with cleavage, and has small inclusions in the central zone.

The International deposit was first discovered in 1969. By the time it was fully developed, reserves were estimated in more than 100 million carats.

"This crystal is unique as it has a large clean area despite the inclusions in the center – this makes it a gem-quality diamond," Evgeny Agureev, Director of the United Selling Organization at Alrosa, said in the media brief. "Well-known hallmarks of the diamonds from the 'International' kimberlite pipe are regular shapes and purity. That is exactly the pipe that most often brings Alrosa regular shape octahedrons with smooth edges."

Agureev said that a similar rock -a 109.61-carat diamond- was mined at the International pipe in the summer of 2017.

Given that the new gem was mined on April 16, 2019, the eve of the launching of Alrosa's Zarya deposit, it will carry the name of the mine.

The International mine, which reached full production rate of 500 kt/a in 2002, is located 16 kilometres south-west of the town of Mirny, in east-central Russia. Mineral resources in the measured category are 20,157 kct, while in the indicated category are 29,608 kct. Approved reserves are characterized by a high diamond content in ore, about 7-8 carats per tonne on average.

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Graff creates 302-carat emerald cut stone from 1,109-carat Lesedi La Rona

In November 2015, Vancouver-based Lucara Diamond Corp. announced that it had recovered a 1,111-carat diamond – the second largest, gem quality stone ever found in the world – from its Karowe mine in Botswana. Following a country-wide contest, the stone was named Lesedi La Rona – meaning “our light”.

Lucara put the Lesedi La Rona up for sale, but initially felt the price offered was too low. The miner hung onto it until September 2017 when it was sold to Graff Diamonds for $53 million or $47,777 per carat.

Graff has now created a 302.37-ct square emerald cut diamond – the world’s largest of that particular cut. The company’s craftsmen used sophisticated software and lasers to make the initial cuts.

The rest of Lesedi La Rona became 66 exquisite satellite stones ranging in size from under a carat to more than 26 carats.

(This article first appeared in the Canadian Mining Journal)

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Rio finds one of largest white diamonds ever at Argyle mine

Rio Tinto’s (ASX, LON: RIO) iconic Argyle mine in Western Australia has yielded one of the largest rare, gem-quality white diamond in its 35-year history.

The 28.84-carat stone, named Argyle Octavia for its unusual octahedral shape, was found in March, the miner said.

Rio finds one of largest white diamond ever at Argyle mine

The octahedral-shaped 28.84 carat stone is one of the largest ever produced by the Rio Tinto's Argyle diamond mine, located in east Kimberley. (Image: Rio Tinto | Flickr.)

The find, said general manager of Argyle Diamonds Andrew Wilson, is unique in its size and shape, and it will take its place in the mine’s history.

With the mine due to shut down next year, the Argyle Octavia could be the last major diamond it produces.

Rio finds one of largest white diamond ever at Argyle mine

The gem, named Argyle Octavia, will be auctioned in Antwerp, Belgium, and could sell for millions of dollars. (Image: Rio Tinto | Flickr.)

In operations since 1983, the Argyle mine is renowned as the world's largest producer of coloured stones, particularly pink ones, with a much more sporadic presence of large white diamonds (0.00007% of its production in the last 36 years.

Rio Tinto did not provide a price estimate for the diamond, which will be sold by tender at the world's diamond trade capital of Antwerp in Belgium later this year.

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One of world’s largest diamond mines gets 10-year life extension

Russia’s Alrosa, the world's top diamond producer by output, is extending the life of its Aikhal mine to 2044 by digging deeper into the ground, in a project estimated to cost about RUB 10 billion ($16m).

The 300 metres underground extension, the company said, will add almost 20 million carats to the raw material base of the Aikhal mining and processing division, allowing it to keep annual output at 500,000 tonnes of ore.

Underground extension of Aikhal is estimated to cost about $16 million.

"The project is also attractive because there's no need for major re-equipment or new infrastructure,” Evgeny Denisov, Director of Aikhal Mining and Processing Division said in a statement.

The Aikhal mine, located in the north-eastern part of Russia in the Sakha Republic, is one of the country’s and the world’s largest diamond mines.

The operation is part of the namesake division, which also includes two open-pit mines — Yubileyny and Komsomolsky. Last year, the unit mined almost 12 million carats worth more $1.2 billion.

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Alrosa launches new Zarya pipe in eastern Russia

The world's top diamond producer by output, Alrosa (MCX:ALRS), announced this week the launching of diamond production at its Zarya pipe in Yakutia, eastern Russia.

The new 300-meter deep deposit, operated by the Aikhal Mining and Processing Division and which started to be prepared for mining in 2016, is expected to have a mine life of over 10 years.

To prepare the Zarya pipe, 14 million cubic meters of overburden were removed and a roadway, hydraulic engineering structures and infrastructural facilities had to be built.

In a media statement, Alrosa said that it spent $187.8 million in the development of the Zarya primary diamond deposit, which makes it is one of the company’s major investment projects in recent years.

According to the miner, the decision to allocate funds to this project was driven by the fact that there is no need to build a new mining and processing division and a plant because Zarya is located in the operational zone of the Aikhal Mining and Processing Division.

Besides the operational advantages, Alrosa said Zarya’s production is also expected to make up for dwindling resources at other sites.

“The new deposit will allow compensating for the depleting stock of Komsomolsky open-pit mine and looking forward it will ensure stable mining for the division,” the media release reads. “In 2021, according to the development roadmap of Aikhal Mining and Processing Division, the enterprise is to reach the design capacity of 1.25 million tons of ore per year and process rough diamonds at the Plant No. 14. The plan is to mine the first 100 thousand tons of kimberlite ore in 2019."

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Petra Diamonds on a roll after another major find at Cullinan

South Africa’s Petra Diamonds (LON:PDL) has found yet another big rock at its iconic Cullinan mine, the third coloured diamond over 100 carats since March that has been unearthed at that operation.

It's is the third Type II D-colour gem-quality diamond weighing more than 100 carats recovered since March.

The 209.9 carat, D colour, Type II gem-quality diamond is also the fourth such stone discovered by Petra so far this financial year.

It follows last month’s recovery of a 100.83 carat gem-quality diamond and a previous 6.12 carat Type II blue stone both found at Cullinan.

The company, which recently appointed former gold miner Richard Duffy as chief executive, said the stone would be included in its upcoming sales cycle, along with a 425 carats D-colour Type IIA diamond recovered on March 29.

Petra has been seeking to turn around its fortunes after piling up debt to expand Cullinan, which yielded the world’s biggest-ever diamond in 1905.

Shares in the company jumped on the news and were trading up 4.5% in London at 17.92p by 3:08 p.m. local time.

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Botswana unveils rare 20-carat blue diamond, the country’s largest ever

Botswana's state-run Okavango Diamond Company unveiled on Wednesday what is believed to be the largest blue diamond ever discovered in the southern African country, one of the world’s top producers.

The 20.46 carats, oval-shape fancy precious rock has been named "The Okavango Blue" in honour of the Okavango Delta, the country's wildlife-rich world heritage site.

From all coloured diamonds, blue ones are the most unusual and that’s why the miner says its find is one of the rarest in the world.

"It is incredibly unusual for a stone of this colour and nature to have come from Botswana – a once-in-lifetime find, which is about as rare as a star in the Milky Way," Okavango Diamond Company managing director Marcus ter Haar said in a statement.

The 20.46 carats, oval-shape fancy precious rock has been named "The Okavango Blue" in honour of the Okavango Delta, the country's wildlife-rich world heritage site.

"It sits in the very top bracket of all-time historical blue diamond finds [especially because] only a very small percentage of the world's diamonds are classified as fancy colour," he noted, adding the company expects to sell it by the end of the year.

In 2016, a massive intense blue diamond, known as The Cullinan Dream, sold for $25.4 million at a Christie’s auction in New York, breaking all records and becoming the most expensive gem of its kind ever sold at auction.

Last year, a 6.16-carat blue diamond, secretly passed down through European royalty over three centuries, fetched $6.7 million at a Sotheby’s auction in Geneva — $1.4 million more than what experts expected it to be sold for.

Arguably, the most famous is the Hope Diamond, also known as Le Bijou du Roi ("the King's Jewel"), Le bleu de France ("France's Blue"), and the Tavernier Blue. The massive, 45.52-carat, deep-blue diamond is now kept at the U.S. National Museum of Natural History in Washington, D.C.

Botswana, which was overtaken by Russia as the world’s top diamond producing country in 2014, is grappling with aging mines, as well as power and water shortages.

Still, diamonds are the country’s main source of income and account for about 80% of its exports.

The nation is home to some of the world’s most prolific diamond mines, including Lucara Diamond’s (TSX:LUC) Karowe operation, where the now-famous Lesedi la Rona, the second-largest gem-quality diamond to ever be found, was unearthed in 2016.

Besides diamonds, the country also produces nickel, copper, coal and iron ore.

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Rapaport proposes diamond industry optimization plan to government of Sierra Leone

During a trade mission to Sierra Leone that involved a group of 29 international diamantaires and jewelers, Martin Rapaport, Chairman of the Rapaport Group, presented a proposal to the government of Sierra Leone that, in his company's view, would optimize the country's diamond industry.

In a media statement, Rapaport said the proposal includes a systematic and sustainable business model that "will optimize the benefit of Sierra Leone’s alluvial diamonds for the diggers, their communities, and the government."

The plan involves giving artisanal diggers the opportunity to sell the diamonds they find through a legitimate government channel.

"The weekly auctions will provide consistent cash flow to the artisanal sector every Thursday. This cash flow will support a strong microeconomic grassroots multiplier effect."

Such channel would be a diamond auction center in Koidu, Kono district, where the famous 709-carat rough "Peace Diamond" was found in 2017.

The center would act as a hub where artisanal diamond diggers or finders will deliver the diamonds they find to a “government receiver,” as it is contemplated in section 167, subsection 5 of the Sierra Leone Mines and Minerals Act 2009.

The receivers would then have to supervise a weekly transparent and competitive public auction where the diamonds may be sold to the highest bidder.

"This will ensure that the diggers and the government get fair market value for their diamonds. The auctions will be open to all sellers, including licensed and unlicensed diggers. Bidding will be restricted to licensed dealers and exporters," Rapaport's proposal reads.

Based on the model used for the sale of the Peace Diamond, the international trading organization says the strategy requires some legal changes to be implemented.

"The law requires that 60% of the value of the diamonds be given to the government. There should be a provision ensuring that 25% of the 60% (i.e., 15% of the value of the diamonds) goes to the communities where the diamonds were found. Furthermore, the 40% given to the diggers should be tax-free. Such benefits to the community will ensure there is incentive for the diggers to bring their diamonds to the government," the document reads.

According to Rapaport, the proposed model should guarantee that government diamond revenue provides vital infrastructure to the communities where the diamonds are found.

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Mountain Province stock takes off on 74% diamond resource increase

Shares of Mountain Province Diamonds Inc. (TSX and NASDAQ: MPVD) hit a two-week high on Thursday after releasing its latest mineral resource estimates at the Faraday 2 kimberlite, located within the Kennady North Project, NWT, Canada. The stock rebounded by more than 12% at the open in Toronto, lifting the company's market capitalization to over C$256 million.

The updated inferred mineral resource at Faraday 2 highlights 5.45 million carats of diamonds, a hefty 74% increase over its 2017 estimate of 3.13 million carats. In addition, a total of 2.07 million tonnes of kimberlite was reported, a 49% increase from the previous estimate. This results in an overall grade of 2.63 carats per tonne, compared with 2.24 carats per tonne in 2017.

Most notably, according to the company, the attributed average value per carat at Faraday 2 has increased to $140, a 25% improvement from the 2017 value of $112 per carat. The average value is derived by applying a base case value distribution model to models of recoverable (+1 mm) diamond size frequency distribution for each geological domain.

"The Faraday 2 project is one of three known kimberlites within our wholly owned exploration properties adjacent to the Gahcho Kué Mine," commented President and CEO Stuart Brown. "As anticipated from our microdiamond results reported earlier this year, the inclusion of the northwest extension at Faraday 2 has greatly increased the value of this resource and at an average diamond value of $140 per carat offers significant potential."

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