Wednesday 20th June 2018

Resource Clips


Posts tagged ‘india’

Unapologetically unorthodox

April 30th, 2018

Jayant Bhandari rejects convention as he discusses economies, cultures and opportunities

by Greg Klein

There are contrarians and there are contrarians. But maybe Jayant Bhandari would be better called a controversian. As a prolific writer/commentator and an adviser to institutional investors, his comments reflect a mind unsatisfied with received wisdom. Now a resident of Singapore, his travels have taken him to 80 countries, seven of which he’s lived in. That background has influenced his perspective on a number of topics including the emerging markets—or emerging market singular. China’s the only one, he insists.

Jayant Bhandari rejects convention to discuss emerging markets, the West and China

Jayant Bhandari goes beyond the
mainstream to examine the West,
China, emerging markets and gold.

Speaking on the phone to ResourceClips.com while visiting central India, he used that country to illustrate what he considers to be the emerging market fallacy. With a per-capita GDP of about $1,800, the country enjoys 7.5% growth. Multiplying those numbers shows India’s economy increasing by $135 per capita.

“Now 7.5% looks very good, but look at America,” Bhandari points out. Although it’s growing at “only” 2.3%, its per-capita GDP reaches nearly $50,000. “That translates into $1,150 growth per capita, which means that America’s GDP, on a per-capita basis, is growing nine times faster than India’s.”

He argues that people and organizations—like the World Bank and IMF—are dead wrong in claiming the two countries shouldn’t be compared.

Taking a pessimistic view towards much of the globe, he emphasizes that “something like 75% of the world’s consumption of commodities happens in China. So it is China which is in the driver’s seat and in my view it will continue to do very well going forward.”

While Chile, Argentina and Peru hold out hope, the rest of South America shows little prospect, he believes. Central America faces serious crime and social unrest. “Just about everything in Africa is imploding. The international media are almost completely ignoring the problems of South Africa which is, in my view, rapidly moving in the direction of a civil war. And if South Africa implodes, it won’t take much for the rest of sub-Saharan Africa to implode.”

Bhandari adds that “Chinese money and Chinese businesses enforce some kind of stability in many of these countries.” Yet lingering problems bode poorly for the future “and it is a reason why Trump is asking for a wall between the U.S. and Mexico. The Third World is not in good shape at all.”

Consequently many of its people appreciate gold’s safe haven status. “They don’t trust their institutions and they don’t trust their social structures,” Bhandari maintains.

Jayant Bhandari disregards convention to discuss emerging markets, the West and China

“The biggest buyers of gold are in the Middle East and south Asia because institutions in these countries simply don’t work and people do not trust them. They do not even trust their families and friends, basically. Pakistan is imploding right now, India is rapidly moving in that direction and wealthy people of these countries will rapidly move their investment wealth into gold once they realize that economic growth isn’t happening anymore.”

Although he regards himself “ambivalent about buying gold in Western countries,” he says: “If enough gold-buying happens in these poor countries, the gold price will do quite well and that will benefit buyers of gold in Western countries.

“Of course you have to protect yourself from government interference and it’s wise to keep some of your wealth in a form that you can keep in your own pocket.”

Still, Bhandari sees too much emphasis on gold’s price in U.S. dollars. Non-American buyers “look at gold in the currencies that they use at home. When people focus too much on U.S. dollar pricing of gold they might not understand the technical future of gold.”

What could trigger a significant and sustained price increase? One possibility could be turmoil in South Africa “because those problems would very rapidly spread across sub-Saharan Africa. But I also see problems continuing to increase in India and if this country increases its consumption very slightly on a per-capita basis, it will start consuming a lot more gold. And social instability is increasing in this country.”

People should pay attention to what Western civilization stands for in hopes that they can preserve it.

Among Bhandari’s more optimistic endeavours is Capitalism and Morality, a philosophy seminar that he hosts in Vancouver each year. “My purpose is to bring people together to discuss Western civilization, what I consider to be the only civilization that has ever existed.”

Considering the West unique for its respect towards reason and individuality, Bhandari says, “People should pay attention to what Western civilization stands for in hopes that they can preserve it.”

What does Bhandari’s perspective mean to investors? He examines the mistakes people make in junior resource stocks at the International Mining Investment Conference, held in Vancouver on May 15 and 16. For a 25% admission discount click here and enter the code RESOURCECLIPS.

Read about conference speakers Simon Moores and Ed Steer.

Flanders to Holland and back

March 13th, 2018

Resource Clips visits the diamond industry in Belgium and the Netherlands

by Greg Klein

Resource Clips visits the diamond industry in Belgium and the Netherlands

A stately building belies elaborate security guarding this Antwerp diamond bourse.

 

As if providing an outer defence, a solid line of retail jewellers blocks two broad avenues from Antwerp’s famed diamond district. Access comes mainly through a side street with a police-controlled traffic barrier. More cops and soldiers (the latter attesting to Belgium’s ongoing terror alert) patrol the narrow streets inside. The only vehicles seem to be armoured vans customized for the diamond trade or the occasional bicycle carrying an Orthodox Jew with long coat and side curls flowing in the wind but magnificent hat solidly perched.

Resource Clips visits the diamond industry in Belgium and the Netherlands

Practitioners in Belgium and the Netherlands
perfected the art of transforming rough stones into jewelry.

Except for the Portuguese synagogue, the buildings look un-Antwerpishly drab, catering to four bourses, several major companies and many more smaller operations that buy and sell stones and/or cut and polish them, as well as businesses selling tools of the trade or offering services like laser inscription removal.

Travel agents advertise flights to Mumbai and the Emirates, the Union Bank of India maintains a local branch and the neighbourhood postal outlet flogs a “one-of-a-kind diamond postage stamp.”

And there are no photos allowed, a courteous but firm police officer insists.

“But I’m a journalist from Canada.”

“I realize that, but it’s not allowed.”

“Being a journalist from Canada?”

“They don’t like it.”

“They” apparently represent the world’s diamond capital, a status Antwerp still holds for grading rough, although no longer for the art of transforming those stones into jewelry. One polishing factory, however, is DiamondLand, which welcomes visitors to its workshop before ushering them into the sales department. A guide explains that Antwerp’s seemingly ubiquitous diamond retailers cater to an international clientele attracted by prices that justify travel expenses.

Resource Clips visits the diamond industry in Belgium and the Netherlands

Traders in 15th-century Bruges met outside
the home of Jacob van der Beurze, from
whom the word “bourse” was derived.

Yet this global diamond centre’s far from any mine. Antwerp and other cities of the Low Countries gained that peculiar stature pretty much by inventing the modern diamond industry. Just how they did that can be explained by a visit to Bruges, aka Brugge.

Those able to tear themselves away from the insufferably pretty canal-side buildings of possibly Europe’s most beautiful fairy tale surroundings could spend a few interesting hours in the city’s Diamond Museum. There, visitors learn of Venetian traders who brought diamonds to Europe from India, once the world’s only known source, eventually establishing a permanent presence in this once-important trade centre by the 15th century. That was before 16th century Portuguese and 17th century Dutch took over the Asian trade routes.

Other European cities had diamond cutters too, but it was in Bruges in 1476 that Lodewijk van Bercken is said to have invented the technique of polishing stones using a wheel, diamond dust and olive oil. His existence might owe more to legend than fact, but the technique continued, enhanced by later refinements and more recent technology.

As local waterways silted up, Bruges lost its overseas trade and the diamond industry shifted to Antwerp, which in the late 15th century became the world’s greatest trade centre overall. The industry gained new blood with migrations of Jews fleeing the Spanish in Spain, the Spanish in Portugal and, later, the Spanish in Flanders as the industry moved once again, this time to Amsterdam. Diamonds played a part in the city’s Golden Age, which flourished especially well after Amsterdammers forced the closure of Antwerp’s port. Protestants from France and Flanders joined the religious diasporas that bolstered Europe’s diamond industry.

During all that time new diamond sources were found in Borneo, Brazil, Russia and Australia, with the greatest discoveries of all in late 19th-century South Africa. That country’s first consignment of stones sparked a boom in Amsterdam, bringing unprecedented demand for cutters and polishers.

Resource Clips visits the diamond industry in Belgium and the Netherlands

This exacting profession continues
to draw new adherents.

Amsterdam’s decline began in the 1920s, to the advantage of Antwerp. Bruges also regained some stature as early 20th-century strikes encouraged some Antwerp companies to move their operations to job-starved West Flanders. Bruges’ on-and-off revival lasted about 61 years, Amsterdam held out with a few prominent companies but Antwerp prevailed. More recently, however, polishing has been moving to places like Tel Aviv, New York, Moscow and especially Surat, where the sector could be joined by the world’s largest diamond bourse, reportedly now under construction.

But Amsterdam, second only to Bruges for canal-side prettiness, to Vancouver for drugs and hookers, and to nowhere for massive mobs of selfie-snapping sightseers, still hosts companies offering workshop tours. Among them is Gassan Diamonds, now ensconced in a building that originally housed Boas Bros, once Europe’s largest company. Among the newer company’s achievements is the patented Gassan Cut with 121 facets.

Further factory visits make facet envy evident. One such operation is Coster Diamonds, founded in 1840 and the world’s oldest remaining diamond company. It was Coster that cut history’s most fabled stone, the Koh-i-Noor, now part of Britain’s Crown Jewels.

Crediting lengthy experience and new technology, Coster created the Royal 201 eight years ago by adding 144 facets to the more traditional brilliant cut, aka the Amsterdam cut. Coster also claims a Guinness record for the smallest polished stone ever—a tiny, tiny brilliant cut of 0.0000743 carats.

But with its 257-facet Star of Amsterdam created two years ago, Amsterdam’s Zazare Diamonds surpasses Gassan and Coster in the many-sided contest. This isn’t just a numbers game, a Zazare rep insists. “More facets mean more sparkle, more life,” she says.

But much of the industry’s sparkle and life have moved elsewhere, especially India. Numbers provided by Rapaport News show the country’s net polished exports, representing exports minus imports, climbed 3.8% to $20.71 billion last year. Belgium’s share fell 34% to $269.2 million.

Although India already hosts the world’s largest gem exchange in Mumbai’s Bharat Diamond Bourse, the Surat Diamond Bourse would far overshadow its neighbour. Construction has begun on a nine-tower complex that could accommodate more than 4,400 merchants, sources told Rapaport. Expected to be fully operational by 2021, the long-delayed proposal would be located within the government-planned Diamond Research and Mercantile (DREAM) City, confirming much of the world’s trade in the country that first found and coveted the gems.

 

Resource Clips visits the diamond industry in Belgium and the Netherlands

Dozens of diamond shops form a solid wall curving
along two streets outside Antwerp’s diamond district.

 

Resource Clips visits the diamond industry in Belgium and the Netherlands

But not all of them thrive.

Authors William Dalrymple and Anita Anand consider responses to India and Pakistan’s rival claims to the Koh-i-Noor diamond, now part of Britain’s Crown Jewels

October 17th, 2017

…Read more

Pomp and plunder

September 23rd, 2017

Indians increasingly dominate diamonds, but their most fabled stone remains elusive

by Greg Klein

Maybe it’s fitting that Indians, said to be the first to truly appreciate the gems, have returned to such prominence in the global diamond trade. The country’s alluvial finds constituted the world’s main source until supplanted by Brazil in the early 18th century. Although Indians originally held rubies and emeralds in even higher esteem, their admiration for diamonds spread to neighbouring cultures and beyond. The story of the Koh-i-Noor shows how one stone came to be associated not only with beauty, majesty and mystery but, more recently, with controversy too.

Indians increasingly dominate diamonds, but their most fabled stone eludes them

By no means the largest diamond ever found, it’s nevertheless been credited with good luck and blamed for misfortune. Some viewers found it dazzling for its brilliance, others were disappointed by its dimness. But it passed through a number of empires, often amid horrific bloodshed, before ending up in Britain’s Crown Jewels. Authors William Dalrymple and Anita Anand recount the rock’s odyssey in their recently published Koh-i-Noor: The History of the World’s Most Infamous Diamond.

While revelling in the myths, legends, propaganda and guesswork associated with the stone, the writers try to set the historical record straight with previously untranslated documents and new gemmological research that reconstructs the Koh-i-Noor as a rough stone.

Ancient accounts refer to a number of large Indian diamonds which could include the Koh-i-Noor. Some were bigger and believed to transmit supernatural power, but the Koh-i-Noor eventually prevailed as the most renowned. Even so, the first definite written reference doesn’t come until the mid-18th century, referring back to northern India’s 17th-century Mughal emperor Shah Jahan.

Such was his captivation for precious stones that they all but monopolized his attention at a banquet featuring a dozen dancing girls of “lascivious and suggestive dress, immodest behaviour and posturing.” In 1635 he made the Koh-i-Noor the centrepiece of his Peacock Throne. An especially lavish piece of furniture meant to evoke the Koranic Solomon’s throne, it cost twice as much to build as the Taj Mahal.

Indians increasingly dominate diamonds, but their most fabled stone eludes them

The Queen Mother’s crown features the Koh-i-Noor
within a Maltese cross between two fleurs-de-lys.

Eventually the Mughals dismantled their seat of ostentation and the Koh-i-Noor became in turn a symbol of power for Persians, the Durrani Empire of Afghanistan and the Sikh empire, as each looting victor became a looted victim. Finally an 1849 treaty ending the Second Anglo-Sikh War ordered a terrified 10-year-old Maharajah Duleep Singh to surrender the celebrated stone to Queen Victoria.

Surviving a perilous voyage, the rock went on display to widespread public anticipation at the 1851 Crystal Palace Great Exhibition. It bombed.

Prince Albert tried to enhance the stone’s effect with gas lamps and angled mirrors. That fizzled too, as the props “turned the display into a sauna, causing visitors to swoon after only a few minutes. The press began to blame the Koh-i-Noor for being difficult, as if it were some kind of contrary and disappointing child.”

Albert then summoned experts who agreed that the diamond “was flawed at its very heart. Yellow flecks ran through a plane at its centre, one of which was large and marred its ability to refract light.” The authorities disagreed, however, on whether the gem could be re-cut without wrecking it. Eventually two of the world’s top pros arrived from Amsterdam and set to work with a state-of-the-art steam-powered grinder in a specially designed shop.

Their bill, for a few months of work, amounted to over a million pounds in today’s terms. Despite assurances to the contrary, moreover, they savaged the stone’s size from 190.3 carats to 93 carats. But dazzle it did. With an unusual symmetry of 33 facets each above and below the gem’s “table,” the cutters redeemed both the stone’s beauty and its public image.

Indians increasingly dominate diamonds, but their most fabled stone eludes them

It helped Victoria dazzle too, in those years before she went into morbid mourning. Waltzing with Napoleon III before 1,200 guests at Versailles, she wore a white satin gown and a diadem adorned with almost 3,000 small diamonds. Among them, the great K “gleamed like a third eye.” Other royal figures ordered it mounted and re-mounted on various regalia until the Queen Mother had it placed in its current crown. She sported the headgear at her daughter’s coronation. But for some reason (maybe trepidation about its supposed curse, the authors suggest), Elizabeth II has never worn it.

Since then, calls for its return have come from competitors, among them India, Pakistan and even the Taliban.

“Others have suggested that it be cut up once again and a piece each given to all those countries that make a credible argument for its return—including modern-day Iran and Afghanistan. But it is most unlikely that such Solomonic wisdom would ever be entertained by the British, nor indeed would it satisfy any of the various parties involved.”

The most persistent calls come from Indians. Equally tenacious has been Britain in its refusals. On a 2010 visit to Punjab, the authors relate, then-PM David Cameron said, “If you say yes to one you suddenly find the British Museum would be empty.”

Yet the country where the great diamond first came to prominence returned to diamond prominence itself late last century. Ironically that happened not due to gems of magnificence but through smaller, lower-quality stones originating in other countries and disdained by the rest of the trade. Through such humble beginnings, the west coast city of Surat now handles more than 80%, or even 90%, of the world’s cutting and polishing work. Mumbai, 290 kilometres south, hosts the world’s biggest diamond bourse. In the world diamond-sorting capital of Antwerp, Indians conduct about three-quarters of the business.

As for rough supply, Rio Tinto NYSE:RIO walked out on the country’s best hope for a major diamond mine in February, when the company handed ownership of the Bunder deposit, once anticipated for 2019 production, to the state government of Madhya Pradesh.

Meanwhile the Dalrymple/Anand book has reportedly spawned renewed activity in the search for India’s alluvial diamonds, maybe even another Koh-i-Noor, with all its blessings and curses.

Of diamonds and dynasties

August 4th, 2017

A new marketing approach accompanies Alrosa’s new emphasis on polished stones

by Greg Klein

A new marketing approach accompanies Alrosa’s new emphasis on polished stones

The Dynasty Collection celebrates Alrosa’s revival of Russian jewelry craftsmanship.
(Photo: Alrosa)

 

Legendary diamonds have long been associated with imperial dynasties. Now, just as a new book promises to revive interest in the multi-empire story of the fabled Koh-i-Noor gem, Alrosa has unveiled a suite of five stones commemorating great families of old Russia. In doing so, the mining giant marks a new emphasis not just on extracting exceptional stones, but cutting and polishing them too. The company says it will use state-of-the-art techniques to revive traditions dating back to Peter I.

A near-second to De Beers as the world’s largest diamond miner by value, Alrosa’s overall strategy might be to broaden diamonds’ appeal beyond the maybe one (or two, or sometimes profligately multiple) life events that call for an engagement ring.

A new marketing approach accompanies Alrosa’s new emphasis on polished stones

(Photo: Alrosa)

The company’s new quintet started as a single 179-carat rough with a name that evokes grandeur, but also tragic decline and a horrific ending: The Romanovs. One and a half years in the making, the polished collection’s centrepiece is The Dynasty, a 51.38-carat traditional round brilliant-cut stone “unprecedented in the history of Russia” as the most expensive and purest of all large diamonds cut in the country.

The set’s other four gems recall wealthy dynasties “that played a crucial role in the development of Russian jewelry”: The Sheremetevs (16.67 carats), The Orlovs (5.05 carats), The Vorontsovs (1.73 carats) and The Yusupovs (1.39 carats).

The collection goes on sale online—take that Christie’s, Sotheby’s and U.S. sanctions—in November.

But there’s no association stronger than actual ownership, and in that regard the Koh-i-Noor might be the most esteemed of all diamonds. In a soon-to-be published book of the same name, authors William Dalrymple and Anita Anand track “the history of the world’s most infamous diamond.”

Here’s a rock that gained prominence in northern India’s 17th century Mughal dynasty, was pillaged by 18th century Persians and retrieved from the corpse of their assassinated ruler by Ahmad Shah, who wore the jewel himself while building the Durrani Empire of Afghanistan. His successors lost the gem, along with considerable territory, to Sikh emperor Ranjit Singh. The authors credit this early 19th century ruler with boosting the diamond’s prestige to an unprecedented level. Following his death and the Sikhs’ defeat at British hands, the victors ordered that the Koh-i-Noor “shall be surrendered by the Maharajah of Lahore to the Queen of England.”

Along with Cullinan I and Cullinan II, the world’s largest top-quality polished stones, the Koh-i-Noor takes its place in the Crown Jewels. Both India and Pakistan want it back.

The book’s publicist promises a saga of “greed, murder, torture, colonialism and appropriation.” But extracting the stones can come at a terrible cost too, and one doesn’t have to delve into history to realize that. Just days after Alrosa unveiled The Dynasty collection, the company reported nine miners missing after a flood at the Mir diamond mine in the far eastern Republic of Sakha.

A steady source of plus-sized rough, Sakha mines gave up gems of nearly 110 carats and 75 carats just last month and, last year, a 207.29-carat stone. The Romanovs was found there in 2015.

A new marketing approach accompanies Alrosa’s new emphasis on polished stones

The Tenner, a £10 flea market
find, sold for $848,000.
(Photo: Sotheby’s)

Size and weight aren’t everything, however, as the 1,109-carat Lesedi La Rona continues to demonstrate. Lucara Diamond TSX:LUC has yet to find a buyer after rejecting a $61-million bid last year for the “tennis ball-sized” Botswana diamond, the largest ever found after South Africa’s 3,106-carat Cullinan that’s since been subdivided and relocated to the Crown Jewels with the Koh-i-Noor. Last May Lucara did sell a piece of its original stone, estimated to have been about 1,500 carats, when cutter Graff Diamonds paid $17.5 million for a 373.72-carat shard that broke off during the mine recovery process.

Another super-sized non-seller is the 709-carat rough found by an artisanal miner in Sierra Leone. He entrusted it to the government, which rejected a $7.8-million bid that failed to meet the stone’s valuation.

But sometimes there’s amazing value to be found among the dross. Thirty years or so after a Brit paid 10 quid for a piece of second-hand “costume jewelry,” the owner got around to asking Sotheby’s for an appraisal. The verdict? “A genuine cushion-shaped diamond weighing 26.29 carats with an attractive colour grade of I and impressive clarity grade of VVS2.”

In dollar terms, that meant a price estimated up to about $450,000. In June the hammer came down on $848,000.

See an infographic about legendary diamonds.

Saskatchewan and Manitoba first and second globally as mining jurisdictions

March 1st, 2017

by Greg Klein | March 1, 2017

Saskatchewan edged one notch upwards to take first place worldwide while Manitoba soared from 19th to second in this year’s Fraser Institute survey of mining and exploration jurisdictions. Those two provinces pushed last year’s top performer, Western Australia, down to third place. Canada’s other top 10 spot went to Quebec, rising to sixth from eighth the year before. All continents but Antarctica came under scrutiny but Canadian, American, Australian and European locales monopolized the top 10.

Farther down the list, the strongest Canadian improvements were Newfoundland and Labrador, climbing to 16th from 25th, and the Northwest Territories, now 21st, previously 35th. Most disappointing were British Columbia (falling to 27th from 18th), Nunavut (31st from 23rd) and Alberta (47th from 34th).

Those findings come from the survey’s Investment Attractiveness Index, which combines two other indices—Policy Perception, a “report card” on government attitudes, and Best Practices Mineral Potential, concerning geological appeal. Representatives of 104 companies responded with their 2016 experiences in mind, giving a numerical rating to questions in several categories regarding their likelihood of investing in a particular jurisdiction. The previous year 109 companies responded.

Here’s the top 10 globally for overall investment attractiveness, with last year’s standings in parentheses:

1 Saskatchewan (2)

2 Manitoba (19)

3 Western Australia (1)

4 Nevada (3)

5 Finland (5)

6 Quebec (8)

7 Arizona (17)

8 Sweden (13)

9 Ireland (4)

10 Queensland (16)

Here are the Canadian runners-up:

15 Yukon (12)

16 Newfoundland and Labrador (25)

18 Ontario (15)

21 Northwest Territories (35)

27 British Columbia (18)

31 Nunavut (23)

40 New Brunswick (45)

47 Alberta (34)

52 Nova Scotia (59)

At least those provinces and territories steered far clear of the bottom 10, where Argentina figures prominently:

95 Mozambique (84)

96 Zimbabwe (98)

97 India (73)

98 Mendoza province, Argentina (101)

99 La Rioja province, Argentina (109)

100 Afghanistan (not available)

101 Chubut province, Argentina (104)

102 Venezuela (108)

103 Neuquen province, Argentina (93)

104 Jujuy province, Argentina (86)

“We believe that the survey captures, at least in broad strokes, the perceptions of those involved in both mining and the regulation of mining in the jurisdictions included in the survey,” stated authors Taylor Jackson and Kenneth P. Green.

Download the Fraser Institute Annual Survey of Mining Companies 2016.

Cash ban hits India’s diamond capital, threatens lower-priced trade

December 2nd, 2016

by Greg Klein | December 2, 2016

India’s sudden ban on 500- and 1,000-rupee notes early last month has suspended at least some operations in the northwestern city of Surat, the world capital of diamond cutting and polishing. Various sources credit the city with transforming approximately 80% of the globe’s rough into jewelry. India is also the world’s third-largest consumer of diamond-ensconced bling.

Cash ban hits India’s diamond capital, threatens lower-priced trade

NDTV reports businesses closing as the lack of cash prevents them from buying rough and paying employees. The government ordered citizens to deposit the notes, worth about $9.77 and $19.54 Canadian, and conduct transactions electronically.

Governments that have limited the use of cash have cited the need to combat terrorism, money laundering, corruption, counterfeiting, tax evasion and the underground economy. Rapaport News stated India’s underground economy constituted 23.2% of GDP, according to 2007 data in the latest World Bank survey.

Only about 30% of Surat’s diamond cutters have bank accounts, NDTV added.

“This industry has been working on an illegal mode of payment in cash until now and to shift to a cashless system will take at least four to six months,” one business owner told the news outlet. But he stated the government decree will eventually benefit merchants and workers. Another source said he expects the suspension to last at least one and a half months.

The two denominations reportedly accounted for 85% or 86% of Indian money in circulation. “The liquidity freeze could influence a global slowdown in demand for lower colour and clarity polished, and in very small melee stones,” Rapaport stated.

Following the first tender of Quebec diamonds in Antwerp last month, Stornoway Diamond TSX:SWY president/CEO Matt Manson attributed India’s demonetization to reduced prices and demand for smaller and lower-quality stones. He said some were removed from the event, to be sold later.

India’s government plans to issue new denominations of 500 and 2,000 rupees. But, NDTV reported December 2, an enormous hoard of contraband seized from a group of low-paid government employees included 57 million rupees (in Canuck terms, over $1.11 million) in so-far uncirculated 2,000-rupee notes.

Pushing the boundaries

October 12th, 2016

Technology opens new mining frontiers, sometimes challenging human endurance

by Greg Klein

This is the second of a two-part feature. See Part 1.

“Deep underground, deep sky and deep sea” comprise the lofty goals of Three Deep, a five-year program announced last month by China’s Ministry of Land and Resources. Part 1 of this feature looked at the country’s ambitions to take mineral exploration deeper than ever on land, at sea and into the heavens, and also outlined other countries’ space programs related to mineral exploration. Part 2 delves into undersea mining as well as some of the world’s deepest mines.

Looking to the ocean depths, undersea mining has had tangible success. De Beers has been scooping up alluvial diamonds off southwestern Africa for decades, although at shallow depths. Through NamDeb, a 50/50 JV with Namibia, a fleet of six boats mines the world’s largest-known placer diamond deposit, about 20 kilometres offshore and 150 metres deep.

Technology opens new mining frontiers, sometimes pushing human endurance

Workers at AngloGold Ashanti’s Mponeng operation
must withstand the heat of deep underground mining.

Diamond Fields International TSXV:DFI hopes to return to its offshore Namibian claims, where the company extracted alluvial stones between 2005 and 2008. The company also holds a 50.1% interest in Atlantis II, a zinc-copper-silver deposit contained in Red Sea sediments. That project’s now on hold pending a dispute with the Saudi Arabian JV partner.

With deeper, more technologically advanced ambitions, Nautilus Minerals TSX:NUS holds a mining licence for its 85%-held Solwara 1 project in Papua New Guinea waters. A seafloor massive sulphide deposit at an average depth of 1,550 metres, its grades explain the company’s motivation. The project has a 2012 resource using a 2.6% copper-equivalent cutoff, with the Solwara 1 and 1 North areas showing:

  • indicated: 1.03 million tonnes averaging 7.2% copper, 5 g/t gold, 23 g/t silver and 0.4% zinc

  • inferred: 1.54 million tonnes averaging 8.1% copper, 6.4 g/t gold, 34 g/t silver and 0.9% zinc

Using the same cutoff, the Solwara 12 zone shows:

  • inferred: 2.3 million tonnes averaging 7.3% copper, 3.6 g/t gold, 56 g/t silver and 3.6% zinc
Technology opens new mining frontiers, sometimes pushing human endurance

This Nautilus diagram illustrates
the proposed Solwara operation.

A company video shows how Nautilus had hoped to operate “the world’s first commercial high-grade seafloor copper-gold mine” beginning in 2018 using existing technology from land-based mining and offshore oil and gas. Now, should financial restructuring succeed, Nautilus says it could begin deployment and testing by the end of Q1 2019.

Last May Nautilus released a resource update for the Clarion-Clipperton Fracture Zone in the central Pacific waters of Tonga.

Another deep-sea hopeful, Ocean Minerals last month received approval from the Cook Islands to explore a 12,000-square-kilometre seabed expanse for rare earths in sediments.

A pioneer in undersea exploration, Japan’s getting ready for the next step, according to Bloomberg. A consortium including Mitsubishi Heavy Industries and Nippon Steel & Sumitomo Metal will begin pilot mining in Chinese-contested waters off Okinawa next April, the news agency stated. “Japan has confirmed the deposit has about 7.4 million tons of ore,” Bloomberg added, without specifying what kind of ore.

Scientists are analyzing data from the central Indian Ocean where nodules show signs of copper, nickel and manganese, the Times of India reported in January. The country has a remotely operated vehicle capable of an unusually deep 6,000 metres and is working on undersea mining technology.

In August the World Nuclear News stated Russia is considering a nuclear-powered submarine to explore northern seas for mineral deposits. A government report said the sub’s R&D could put the project on par with the country’s space industry, the WNN added.

If one project alone could justify China’s undersea ambitions, it might be a 470.47-ton gold deposit announced last November. Lying at 2,000 metres’ depth off northern China, the bounty was delineated by 1,000 workers and 120 kilometres of drilling from 67 sea platforms over three years, the People’s Daily reported. Laizhou Rehi Mining hopes to extract the stuff, according to China Daily.

China’s deep underground ambitions might bring innovation to exploration but have been long preceded by actual mining in South Africa—although not without problems, as the country’s deplorable safety record shows. Greater depths bring greater threats from rockfalls and mini-earthquakes.

At 3.9 kilometres’ depth AngloGold Ashanti’s (NYSE:AU) Mponeng holds status as the world’s deepest mine. Five other mines within 50 kilometres of Johannesburg work from at least three kilometres’ depth, where “rock temperatures can reach 60 degrees Celsius, enough to fry an egg,” according to a Bloomberg article posted by Mineweb.com.

In his 2013 book Gold: The Race for the World’s Most Seductive Metal, Matthew Hart recounts a visit to Mponeng, where he’s told a “seismic event” shakes the mine 600 times a month.

Sometimes the quakes cause rockbursts, when rock explodes into a mining cavity and mows men down with a deadly spray of jagged rock. Sometimes a tremor causes a “fall of ground”—the term for a collapse. Some of the rockbursts had been so powerful that other countries, detecting the seismic signature, had suspected South Africa of testing a nuclear bomb.

AngloGold subjects job-seekers to a heat-endurance test, Hart explains.

In a special chamber, applicants perform step exercises while technicians monitor them. The test chamber is kept at a “wet” temperature of eighty-two degrees. The high humidity makes it feel like ninety-six. “We are trying to force the body’s thermoregulatory system to kick in,” said Zahan Eloff, an occupational health physician. “If your body cools itself efficiently, you are safe to go underground for a fourteen-day trial, and if that goes well, cleared to work.”

Clearly there’s more than technological challenges to mining the deeps.

By the way, credit for the world’s deepest drilling goes to Russia, which spent 24 years sinking the Kola Superdeep Bore Hole to 12,261 metres, halfway to the mantle. Work was halted by temperatures of 180 degrees Celsius.

This is the second of a two-part feature. See Part 1.

June 13th, 2016

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Texas is waging a new battle—against the entire financial system Equities.com
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Bank of Montreal warns against other banks in gold business GoldSeek
U.S. jobs report changes the landscape for gold Streetwise Reports
Elon Musk: Our lithium-ion batteries should be called nickel-graphite Benchmark Mineral Intelligence
Dissecting lithium battery technology Industrial Minerals
Lithium in Las Vegas: A closer look at the lithium bull The Disruptive Discoveries Journal
A tale of two gluts: Oil and ore approach $50 on opposite paths NAI 500