South African Diamonds Essay Research Paper South

South African Diamonds Essay, Research Paper

South African Diamonds

South Africa is currently the world’s fifth largest producer of natural diamonds. In 1995, some 9,8 million carats of rough diamonds were produced. A high percentage of these diamonds was of gem and near-gem quality.

Diamonds occur in pipes and fissures of kimberlite, as well as in alluvial and marine deposits. Pipes of kimberlite are commonly circular in shape, and become smaller with increasing depth. The well-known Premier Pipe, at Cullinan in Gauteng, the largest in South Africa, covers an area of 54 ha.

Approximately one out of every 100 pipes can be economically mined. As the elements erode diamond-bearing pipes, the stones are liberated from the kimberlite and transported over long distances. Such diamonds are transported in rivers and can be concentrated as alluvial deposits in riverbeds. This kind of deposit is found mainly 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 form marine alluvial diamond deposits. These diamond deposits are restricted to the west coast, in particular the coastline north and south of the Orange River mouth at Alexander Bay in the Northern Cape. Owing to weathering, 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 monument, and a museum depicting the history of diamond mining in the country has been established near the site.

South Africa has an established diamond cutting industry. All rough diamonds mined locally are first offered for sale to the cutting industry. Those stones that cannot be processed locally are available for export.

A new system was introduced in January 1993, whereby only De Beers may export all of its diamonds. It then imports the same stones which theoretically would have been sold locally, plus additional rough diamonds from other contracted non-South African diamond mines.

Overview

South Africa has been a major diamond producer for over one hundred years during which time De Beers, primarily through its management of the Central Selling Organisation, has established itself as the pre-eminent diamond mining and marketing company playing a central role in the world diamond industry. Most of the diamonds are mined offshore and onshore the West Coast of South Africa just south of the Namibian border.

South Africa is currently the world+s fifth-largest producer of natural diamonds. In 1997, some 10 million carats of rough diamonds were produced. A high percentage of these are of gem and near-gem quality. Diamonds occur in pipes and fissures of kimberlite, as well as in alluvial and marine deposits. The well-known Premier Pipe, at Cullinan in Gauteng, the largest in South Africa, covers an area of 54 hectare.

De Beers and TransHex are South Africa’s two largest producers of diamonds. TransHex agreed in principle to merge with Ocean Diamond Mining in 1999, but this merger failed to take place.

Diamond Mining

South Africa’s 1995 rough diamond production was more than ten million carats, putting it fifth in the world league of producers by weight, after Australia, the Democratic Republic of Congo, Botswana and Russia. De Beers mines accounted for 94 % of the year’s volume with 625 000 carats from other sources.

De Beers dominates the southern African diamond mining business. De Beers produced 9.4m carats from its SA mines during 1996. De Beers Marine produces around 480,000 carats annually. The De Beers mining complexes are:

* Finsch mine in the Cape, the world’s most modern underground diamond mine, which merged with the Kimberley and Koffiefontein mines to create a single management unit;

* the Premier diamond mine, which has produced many of the world’s largest diamonds;

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

The next largest South African diamond producer is the TransHex group which produced 188,000 carats in the year to March 1997 both from alluvial diamond operations along the south bank of the Orange river close to where it reaches the Atlantic at Oranjemund and seven offshore marine concessions. Trans-Hex operates retreatment plants around the Bellsbank, Sover and Roberts Victor mines in the Kimberley area. 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 financial year. Exploration is underway at Reuning South, Nxodap, Bloeddrif and Hondeklip Bay and along the Orange River at Baken, where proven ore reserves have been increased to eight and a half years at current production levels. Trans-Hex sells its production outside the CSO through dealers in Antwerp. Toronto listed subsidiary Trans Hex International (THI) is involved in exploration work in countries including Namibia, Indonesia, Angola and Brazil.

Messina Diamond Corporation, listed on the Toronto Stock Exchange, produces around 50,000 car

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