Sunday 27th September 2020

Resource Clips

Posts tagged ‘zimbabwe’

Mining resumes under COVID-19 but faces slow return: GlobalData

April 28th, 2020

by Greg Klein | April 28, 2020

Mining resumes under COVID-19 but faces slow return GlobalData


As of April 27 some 729 mines worldwide remain suspended, down from more than 1,600 shutdowns on April 3. The numbers, released by GlobalData, reflect government decisions to declare the industry an essential service, as well as implementation of new health standards and procedures. Those efforts, often involving staff reductions, contribute to “a slow return for the industry,” stated the data and analytics firm.

“Silver production is currently being severely damaged by lockdown measures,” pointed out GlobalData mining analyst Vinneth Bajaj. “As of 27 April, the equivalent of 65.8% of annual global silver production was on hold. Silver mining companies such as First Majestic, Hochschild, Hecla Mining and Endeavour Silver have all withdrawn their production guidance for 2020 in the wake of the outbreak.

Mining resumes under COVID-19 but faces slow return GlobalData

“Progress has also been halted on 23 mines under construction, including the US$5.3-billion Quellaveco copper mine in Peru, which is one of the world’s biggest copper mines currently under development…. In Chile, while a lockdown is not in force, Antofagasta has halted work on its Los Pelambres project and Teck Resources has suspended work on the Quebrada Blanca Phase II mine.”

Jurisdictions that have lifted suspensions include Quebec, India, Argentina, Zimbabwe and South Africa, GlobalData added. Countries with government-ordered lockdowns still in force include Bolivia (until April 30), Namibia (May 4), Peru (May 10) and Mexico (May 30).

At least one Mexico operator, Argonaut Gold TSX:AR, plans to re-open on May 18 under an exception for businesses operating in municipalities with few or no cases of COVID-19.

Quebec’s resumption of mining drew strong criticism from Makivik Corporation, which represents the Inuit of the province’s Nunavik region.

“Makivik will not entertain the opening of any mines at this time in Nunavik. This is very dangerous,” said corporation president Charlie Watt on April 17. “The Inuit-elected officials in the communities and in the different regional organizations need to be heard and need to make the decisions and call the shots.”

One day later production resumed at Glencore’s Raglan nickel mine. The company stated that Nunavik authorities have banned travel between the mine and regional villages to protect the local population. Local workers stay home with compensation, while the mine employs workers from the south, including Inuit who live in the south.

Without question this is taking a toll on all of our mines and service/supply companies.—Ken Armstrong, NWT and
Nunavut Chamber of Mines

Six mines still operating in Nunavut and the Northwest Territories use similar staffing precautions. “The mines are operating with reduced workforces which they must fly in by charter from as far away as eastern Canada,” said NWT and Nunavut Chamber of Mines president Ken Armstrong. “To protect vulnerable northern communities from the virus they have sent their local employees home with pay and they are maintaining costly and unplanned virus protection measures.”

Meanwhile Labrador politicians expressed concern about renewed operations at Champion Iron’s (TSX:CIA) Bloom Lake mine on the Quebec side of the Labrador Trough. On April 28 VOCM radio reported that MP Yvonne Jones asked the company to avoid the Wabush airport in her riding and transport employees entirely through Quebec. Member of the House of Assembly Jordan Brown said contractors were making unnecessary trips to the Newfoundland and Labrador side.

Another pandemic-caused Quebec mining suspension will stay on care and maintenance due to market forces. Renard owner Stornoway Diamond stated, “Despite positive signs in the diamond market in early 2020, the recent COVID-19 pandemic has resulted in the entire marketing chain and diamond price collapse.”

Prior to the suspension, Renard operated only through creditor support.

Another diamond casualty has been the Northwest Territory’s Ekati mine, which suspended operations last month. Majority owner Dominion Diamond Mines received insolvency protection on April 22.

Discovered in 1991 and opened in 1998, Ekati “provided nearly 33,000 person-years of employment, and $9.3 billion in business spending, with over half the benefits (51% of jobs and 69% of spending) going to northern residents and businesses,” the Chamber stated. “Billions of dollars in various taxes and royalties have also been paid to public and indigenous governments by the mine.”

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.

Infographic: Countries of origin for raw materials

November 16th, 2016

Graphic by BullionVault | text by Jeff Desjardins | posted with permission of Visual Capitalist | November 16, 2016

Every “thing” comes from somewhere.

Whether we are talking about an iPhone or a battery, even the most complex technological device is made up of raw materials that originate in a mine, farm, well or forest somewhere in the world.

This infographic from BullionVault shows the top three producing countries of various commodities such as oil, gold, coffee and iron.

Infographic Countries of origin for raw materials


The many and the few

The origins of the world’s most important raw materials are interesting to examine because the production of certain commodities is much more concentrated than others.

Oil, for example, is extracted by many countries throughout the world because it forms in fairly universal circumstances. Oil is also a giant market and a strategic resource, so some countries are even willing to produce it at a loss. The largest three crude oil-producing countries are the United States, Saudi Arabia and Russia—but that only makes up 38% of the total market.

Contrast this with the market for some base metals such as iron or lead and the difference is clear. China consumes mind-boggling amounts of raw materials to feed its factories, so it tries to get them domestically. That’s why China alone produces 45% of the world’s iron and 52% of all lead. Nearby Australia also finds a way to take advantage of this: It is the second-largest producer for each of those commodities and ships much of its output to Chinese trading partners. A total of two-thirds of the world’s iron and lead comes from these two countries, making production extremely concentrated.

But even that pales in comparison with the market for platinum, which is so heavily concentrated that only a few countries are significant producers. South Africa extracts 71% of all platinum, while Russia and Zimbabwe combine for another 19% of global production. That means only one in every 10 ounces of platinum comes from a country other than those three sources.

Graphic by BullionVault | posted with permission of Visual Capitalist.

Myanmar’s dirty ‘state secret’

October 26th, 2015

Environmental and human rights abuses taint the most prestigious type of jade

by Greg Klein

One of the planet’s most precious gems, the highest-quality jade can sell for over $13,000 a kilo. What that meant to Myanmar last year alone was at least $12 billion in production, more likely up to $31 billion, according to Global Witness. That figure represents about 48% of the impoverished country’s GDP and 46 times the expenditures on health care. But, the human rights group maintains, most of the money goes to government insiders and military officers, their families and cronies, and the war efforts of both sides in an independence struggle that’s left thousands dead since 2011.

It’s another story of conflict minerals from a deeply troubled part of the world. Yet Chinese appetite persists for jade in both its forms, the more expensive but often ethically tainted jadeite from next-door Myanmar and the more modestly priced nephrite jade, of which British Columbia supplies about 75% of world supply. As Myanmar prepares for its first elections since the military junta ended in 2011, Global Witness released an October 23 study calling for thorough reform of the jadeite industry, possibly “the biggest natural resources heist in modern history.”

It centres around Hpakant in Kachin state, the world’s biggest jade mining district and described by a community leader as “one of the most valuable places on earth because you can earn billions from a very small area… and yet only a small number of people are getting advantages.”

“If openly, fairly and sustainably managed, this industry could transform the fortunes of the Kachin population and help drive development across Myanmar,” Global Witness states. “Instead, the people of Kachin state are seeing their livelihoods disappear and their landscape shattered by the intensifying scramble for their most prized asset. Conditions in jade mines are often fatally dangerous, while those who stand in the way of the guns and machines face land grabs, intimidation and violence.”

As heavy equipment and explosives demolish hills of jade, “mountains have become valleys and valleys have become mountains,” one source said. Polluted rivers, water-filled craters, deforestation, landslides and flooding now characterize Hpakant.

As for the beneficiaries, Global Witness’ 12-month investigation revealed a list that “reads like a who’s who from the darkest days of junta rule.” They include families of high-ranking military and government figures, some dating to the dictatorship, others with the current cabinet. At least four “army companies” exploit jade to provide “off-budget finance for secret military projects and an income stream for retired army officers.” Tycoons with junta connections lead a third category of “crony companies.” Drug lords control a fourth category.

The four can overlap. Drug lords, according to one source, can bribe an army officer for his assistance in securing a jade concession. “If the licence comes through, this general or one of his family members will get a share in the mining company.”

They do very well indeed, at Hpakant’s expense. Jade companies linked to former military dictator Than Shwe, current government minister Ohn Myint, drug lord Wei Hsueh Kang and government crony Aike Htwe “recorded around US$430 million in pre-tax sales at the 2014 official government jade sale alone.”

Jade also provides the main source of income for two rebel groups, the Kachin Independence Army and the Kachin Independence Organization. That makes “the battle for control of jade revenues a strategic priority for both sides in the conflict.” Apart from having killed thousands of people since 2011, the struggle has displaced another 100,000, Global Witness reports. Like the government military, the rebels stand accused of war crimes.

When many fear hardliners may finance sectarian violence and dirty tricks, Myanmar’s citizens urgently need to know where the jade money is going.

With the industry playing an integral role in both motivating and financing the struggle, peace depends on addressing “the question of who benefits from Kachin state’s jade.”

Until the early 1990s, when the junta got involved in jade concessions, small-scale operations with local miners benefited. Now, with a “massive upswing” in jade extraction over the last year, local people fear resource depletion could leave nothing for future generations.

That adds a sense of urgency to Global Witness’ call for reform. So does the impending November 8 election. “When many fear hardliners may finance sectarian violence and dirty tricks, Myanmar’s citizens urgently need to know where the jade money is going.”

Global Witness describes its mission as investigating and campaigning “to change the system by exposing the economic networks behind conflict, corruption and environmental destruction.” Among other projects, previous Global Witness campaigns have targeted conflict diamonds in Zimbabwe and the Central African Republic, and conflict gold and tantalum in the Democratic Republic of Congo.

Download Jade: Myanmar’s “Big State Secret”.

November 22 update: A landslide at a Myanmar jade mining site kills over 100 people.

Diamonds not forever

March 13th, 2015

The gems failed to enrich Zimbabwe and now its resources are running out

by Greg Klein

Zimbabwe’s vow to merge all the country’s diamond miners into one state-led entity follows reports that the country’s largest diamond-producing region has largely played out. The Marange fields, once considered the world’s biggest diamond-producing area by volume, has left Zimbabwe little if anything to show. Much blame has been directed at the government. Now that same government rationalizes its planned merger on the basis of transparency.

The mining minister’s announcement, reported by Reuters on March 12, gives companies until March 16 to respond. The idea had been discussed previously but was originally directed at six companies working in the Marange, where the government already holds a slightly better than 50% stake. The plan now encompasses every diamond miner in the country, including Rio Tinto’s NYE:RIO 78%-held Murowa mine.

The gems failed to enrich Zimbabwe and now its resources are running out

Earlier this month Zimbabwean finance minister Patrick Chinamasa told parliament he’s not expecting diamond revenue this year because, as stated, Marange’s resources are depleted and miners have no capacity to dig deeper. The journal added, “When the Marange diamonds were ‘discovered’ around 2005, then-mines minister Obert Mpofu claimed that Zimbabwe would earn $2 billion annually from the gems. Mpofu famously boasted that the country would never again need to beg for financial help.”

Yet Zimbabwe still depends on handouts from the West and China, which has invested widely in the country. Meanwhile accusations of corruption persist. In one example, president Robert Mugabe’s inner circle stands accused of “perhaps the biggest single plunder of diamonds the world has seen since Cecil Rhodes,” stated human rights watchdog Partnership Africa Canada in November 2012. “Conservative estimates place the losses due to illicit activity at over $2 billion since 2008.”

PAC noted Mpofu’s “unexplained wealth,” exhibited by a conservative estimate of $20 million in personal spending, mostly in cash, over the previous three years.

Accusations hardly stop there. Last July Mpofu tried to deflect charges of demanding a $10-million bribe from diamond miners by pointing out his accusers also faced charges—of defrauding the government of $2 billion, the Zimbabwe Herald reported.

After Chinamasa announced Marange’s depletion earlier this month, opposition critics again raised accusations of government corruption. Chinamasa didn’t deny the allegations, but offered a strange rationale. “Sanctions have caused corruption and other vices you are talking about,” quoted him. “Business is no longer done directly due to sanctions and for your own information these illegal measures were put on us not because of human rights violations but because we had taken back our land.”

The sanctions followed concerns from organizations like PAC, which called Zimbabwe and Angola “the main perpetrators of diamonds-related human rights abuses, as their governments have waged violent campaigns to control lucrative diamond fields.”

Nor did Zimbabwe do well after the EU lifted its embargo in 2013. Last September Belgian authorities confiscated Zimbabwean diamonds up for auction in Antwerp, following a $500-million suit by Amari Platinum Holdings over a cancelled mining concession. The following month diamond miners warned they would face “collapse” if Zimbabwe adds a new 15% dividend to their government payments.

Analyst Paul Zimnisky estimates 2013 Marange output at nearly 17 million carats. Pointing out that neither the government nor miners release production figures, he stated anecdotal evidence suggests this year’s production will fall to between six million and 10 million carats averaging a low $45 per carat. Continued U.S. sanctions, he stated, “has resulted in Marange diamonds trading at a discount to global market prices.”

As for the planned miners’ merger, it would come under a Zimbabwean government affiliate, Zimbabwe Mining Development Corp, “which has mining partnership agreements with quasi-private entities, most of which are thought to have ties with Zimbabwe ex-military and political officials,” Zimnisky added.

A diamond-rich neighbour has fared considerably better. Botswana took advantage of its resources to face up to the once-indomitable De Beers, taking a 15% share of the global giant. Through 50/50 joint ventures with De Beers, the country holds a bigger stake in its Botswana mines. The country won another historic victory when it persuaded De Beers to transfer its sorting and sales operations to the capital city of Gaborone. The move was part of a government goal to make the country a global “mines-to-market hub.”

De Beers credited diamonds with 25% of Botswana’s GDP in 2013 and 75% of exports that year. But in last November’s state of the nation address, President Seretse Khama Ian Khama called for greater diversification, warning that diamonds alone can’t sustain the economy, reported. Even so, “We will remain a leading global producer over the next three decades until at least 2050.”

Zimbabwe’s diamond mining industry faces “collapse”

October 20th, 2014

by Greg Klein | October 20, 2014

Government demands for money could kill off Zimbabwe diamond mining, sources told the Harare Herald. According to an October 17 story, banks have been ordered to deduct an additional 15% dividend from gross diamond sales retroactive to April, when new regulations were passed.

Zimbabwe’s diamond mining industry faces collapse

“Officials in the sector said they will end up having more than 50% of gross sales going to taxes, inclusive of royalties, management and depletion fees, with corporate tax chewing at least 25% at the end of each year,” the Herald reported.

“That was a killer, it’s like adding a huge load on top of an ailing horse,” the paper quoted Marange Resources acting CEO Mark Mabhudhu. “Already we have royalties at 15% as well before looking at other costs which leaves me with nothing as Marange Resources.”

Exacerbating the problem, Belgian authorities last month seized roughly $40 million of Zimbabwean diamonds at an Antwerp auction pending settlement of a $500-million suit by Amari Platinum Holdings over a cancelled mining concession.

Referring to a meeting with the Ministry of Mines, Diamond Mining Company general manager Ramsey Malik told the Herald, “All the mining companies present confirmed that operations will stop if the directive is enforced.”

An anonymous source with Mbada Diamonds added, “What it means is that if government takes 15% special dividend, the other shareholder will also take 15% because you cannot declare dividend on one shareholder and leave the other. That will take our total tax costs to almost 60%.”

In July the Herald stated Zimbabwe intended to merge the country’s diamond miners with the intention of “curbing leakage in diamond revenue and enhance transparency in diamond mining,” as mines minister Walter Chidhakwa put it.

But Farai Maguwu, director of a monitoring group called Center for Community Development, predicted efforts will fail because of “strong and powerful people who are untouchable.”

The Herald also stated, “The industry has been mired in controversy over non-remittance to the national treasury and its ownership structure has never been clear, with civil groups accusing top government and military officials of pocketing revenue and committing human rights abuses in the local Marange and Chiadzwa areas.”

The Herald added, “Some independent groups that investigated the Chiadzwa dealings, including Partnership Africa Canada, accused the Mugabe regime of operating a ‘parallel government’ funded by proceeds from illegal diamond sales.”

Diamond authority Paul Zimnisky attributes last year’s Marange diamond fields production at nearly 17 million carats, or 13% of global supply by volume. But the alluvial resources are dwindling quickly. “In 2014, Marange production is estimated to drop to 8 to 12 million carats or less.”

Diamonds in demand

September 17th, 2014

Supply can’t keep up so the quest continues for new deposits, says De Beers

by Greg Klein

Growing diamond demand “will almost certainly outstrip growth in carat production, given the lack of major new discoveries in the last decade and the projected slowdown in several existing mines.” That’s among the findings of the first annual Diamond Insight Report released September 17 by De Beers, the global giant of the gem’s mining and vertical integration. A moderate increase in supply will fail to match demand up to 2020. Then, “unless major new discoveries are made in the coming years, supply can be expected to decline gradually.”

Between 2008 and 2013, consumer demand for polished diamonds rose nearly 5% in compound annual growth, driven largely by China, India and the U.S., according to De Beers. The company estimates last year’s rough diamond production at 146 million carats globally, representing a 7% increase in volume over 2012 and a 3% rise in value to US$18 billion. Even so, volume fell far below the 2005 peak, which surpassed 176 million carats.

Supply can’t keep up so the quest continues for new deposits, says De Beers

Not surprisingly, exploration spending “is expected to remain high as the chase to find the next major source of diamonds intensifies,” the report states. Most diamond exploration now takes place “in historically underexplored African countries such as Angola, the Democratic Republic of Congo and Zimbabwe, as well as the vast swaths of arctic Siberia and Canada.”

Yet exploration for diamonds hasn’t kept pace with that of other natural resources, De Beers maintains. Although last year’s global spending hit 250% above the 2001 figures, that amount fell to “practically half the record levels seen in 2007, when the industry was spending almost US$1 billion per year on diamond exploration.”

“The trend here differs from the mining sector in general, where 2013 expenditure, although lower than in 2012, remains well above 2007/2008 levels.”

If there are more of the really big Tier 1 deposits to be found, they remain elusive. The world has only seven such mines currently. The largest of eight projects coming onstream has a relatively modest peak production estimate of five million carats a year. That’s the De Beers/Mountain Province Diamonds TSX:MPV Gahcho Kué joint venture in the Northwest Territories’ Lac de Gras region. Just one other projected operation, the Grib mine in Russia, comes close with an estimated four million carats annually. The other six, in Canada, Russia, India and Botswana, have estimates ranging from two million carats per year down to 400,000 carats.

But the report cautions that “no amount of investment in exploration guarantees the discovery of deposits on which sustainable mining operations can be built.” Furthermore new discoveries take considerable time to move into production. “From 1950 to today, it took an average of 14 years between the discovery of a diamond deposit and the start of production.” More recently, that timeline has been expanding. Gahcho Kué, slated to begin operations in 2016, was discovered in 1995.

Exploration will likely focus on “those areas where the prospectivity potential is highest and where the least exploration has been conducted to date, such as central Africa, Russia and Canada.” Additional carats might still be found in South Africa and Zimbabwe, despite their long histories of diamond mining, thanks to advances in geophysical technology.

The challenges of discovery and development “in some of the world’s most inhospitable places are astonishing feats of engineering and human ingenuity.” De Beers, active in both the NWT’s Gahcho Kué development project and Snap Lake mine, ranks the Canadian sub-Arctic among the world’s “more hostile natural environments.” But it’s also “home to some of the largest recent developments of diamond mines.”

[Diamond exploration will likely focus on] those areas where the prospectivity potential is highest and where the least exploration has been conducted to date, such as central Africa, Russia and Canada.—De Beers’ Diamond Insight Report 2014

“Such operations are inherently more complex to run and involve greater infrastructure investments,” the report continues. “Miners go to extraordinary lengths to bring diamonds to market. This has always been the case and supply will continue to increase as demand grows. However, this cannot happen without substantial effort and investment. The cost and complexity of mining diamonds will continue to increase, and diamonds will remain one of the most coveted of earth’s products.”

Apart from Snap Lake, Canada’s sub-Arctic hosts the Ekati mine (majority-held by Dominion Diamond TSX:DDC) and Diavik (Rio Tinto NYE:RIO/Dominion). All three mines, as well as Gahcho Kué, lie within the NWT’s Lac de Gras region, the site of substantial junior exploration activity.

De Beers also runs the Victor mine in northern Ontario as well as operations in Botswana, Namibia and South Africa. Last year the company, once a cartel that controlled most of the global diamond industry, handled 33% of the world’s rough diamond sales by value.

De Beers’ supply/demand forecasts generally echo Bain & Company’s Global Diamond Report 2013, which estimated supply growth of 2% annually for 10 years contrasting with demand growth of 5.1% as “existing mines get depleted and no major new deposits come online.”

Download the Diamond Insight Report 2014.

Opportunities in opulence

March 7th, 2014

From Canada to Antwerp, diamond explorers, miners and traders serve a thriving market

by Greg Klein

For giant miners and junior explorers alike, diamonds upheld their market lustre in 2013 and show further encouragement this year. So it wasn’t quite an industry-wide shock when one record-shattering sale fell through. A group of investors fronted by New York diamond cutter Isaac Wolf defaulted on last November’s $83.2-million bid for the Pink Star, Sotheby’s revealed late last month. Now the auctioneer’s out the $60 million guaranteed to the anonymous seller. But the company retains the stone, to which it attributes an “inventory” value of $72 million. Meanwhile, undeterred by the caprice of the super-rich, efforts continue to find, mine and market opulence for the affluent.

This month Rio Tinto NYE:RIO heads to Antwerp and Israel for the company’s first rough diamond tender of 2014. Rio says this offer of 124 lots “showcases a unique combination of white and fancy-coloured rough diamonds” from its mines in Australia, the Northwest Territories and Zimbabwe. Among notable stones from the NWT’s Diavik, Rio’s peddling a 70-carat white diamond, several purple diamonds and some “fancy and intense” yellow diamonds.

From Canada to Antwerp, diamond explorers, miners and traders serve a thriving market

Kennady Diamonds has infill drilling underway
at its Northwest Territories diamond project.

Once pulled out of the ground, about 80% of the world’s diamonds go to Antwerp, the undisputed capital of global trade since the 15th century. The city handles about $11.2 billion worth of rough stones annually, out of a global total of $14.2 billion, according to the Antwerp World Diamond Centre. Vying for a piece of the action are some 1,850 local companies crowded into their own fabled district with “Flemish, Orthodox Jewish and Indian diamantaires working alongside manufacturers, rough and polished dealers, buyers and services providers from almost every country in which diamonds are mined, processed, bought and sold.”

The centre characterized last January as an “excellent 2014 kick-off” in which the value of exports jumped 27.7% and imports 21% over the same month last year. Exports showed “an all-around increase, principally to the usual consumer markets India, the United Arab Emirates and Hong Kong.”

Polished diamonds picked up too. January exports improved 9.69% and imports 13.79% in value over the same month in 2013.

Although the stones’ esthetic vagaries complicate matters, diamond prices remained relatively stable last year, avoiding the declines seen in precious metals. Giants did well, with Rio reporting a 15% increase in diamond revenue over 2012. De Beers proclaimed 2013 “a strong year of growth” for its Forevermark diamond brand, “driven predominantly by continued consumer demand in core markets, China, U.S., India and Japan.” Many Canadian-listed juniors and mid-tiers rose well above the malaise suffered by their counterparts in other commodities.

Among activity within Canada, Kennady Diamonds TSXV:KDI continues working towards a maiden resource for its eponymous project in the NWT. Infill drilling began last week, according to a March 6 statement, part of a plan to better define the Kelvin kimberlite body prior to a mini-bulk sample of 25 to 30 tonnes. Last year a 4.3-tonne sample from Kelvin showed 5.38 carats per tonne with the three largest diamonds comprising “a 2.48-carat off-white transparent octahedral, 1.06-carat off-white broken aggregate and a 0.9-carat off-white transparent irregular,” Kennady stated.

The March 6 update also reported an amended exploration agreement with the Lutsel K’e Dene First Nation and receipt of a five-year land use permit and seven-year water licence.

The same day Shore Gold TSX:SGF announced a “target for further exploration” for its central Saskatchewan properties. A TFFE uses exploration data to disclose potential quantity and grade that might not be realized in an eventual resource estimate. On that basis, Shore’s TFFE for seven kimberlites “is estimated to include between 983 million and 1.17 billion tonnes of kimberlite containing between 52 and 90 million carats.”

The seven kimberlites spread over two properties, Shore’s wholly-owned Star-Orion South project and the adjacent Fort à la Corne, a joint venture shared 67%/33% between Shore and Newmont Mining Corp of Canada TSX:NMC.

A 2011 feasibility study showed a probable reserve for the Star and Orion South deposits:

  • Star: 165.89 million tonnes averaging 12.3 carats per hundred tonnes for 20.386 million carats of diamonds

  • Orion South: 113.09 million tonnes averaging 12.4 cpht for 13.994 million carats

  • Total: 278.98 million tonnes averaging 12.3 cpht for 34.38 million carats

The two deposits also have inferred resources totalling 9.1 million carats.

In other Canadian diamond activity, North Arrow Minerals TSXV:NAR closed a $5-million private placement late last month to fund three projects, two of them 80% options with Stornoway Diamond TSX:SWY. The Qilalugaq property in Nunavut is slated for a 1,500-tonne bulk sample and an Antwerp valuation next summer. Pikoo, a Saskatchewan project heralded for its diamond discovery in November, is expected to undergo till sampling this year to seek out additional kimberlites.

On the earlier-stage Redemption project in the NWT, North Arrow holds a 55% option with Arctic Star Exploration TSXV:ADD. This year’s plans include till sampling and geophysics at the 11,493-hectare project, 32 kilometres from the Ekati mine and 47 from the Diavik mine.

Dominion Diamond TSX:DDC looms large in the region, holding an 80% interest in Ekati, 58.8% of the mine’s Buffer zone and 40% of Diavik. Chuck Fipke and Stewart Blusson, two pioneers of Canadian diamond exploration, each hold 10% of Ekati, while Rio holds 60% of Diavik. Dominion ranks fourth worldwide for diamond production by value.

An Antwerp report that came through in late February evaluated a 1,013.5-carat parcel of commercial-size stones for Peregrine Diamonds TSX:PGD. Taken from the CH-6 kimberlite pipe in Nunavut, the gems were priced at an average of $213 per carat for a total of $215,605. Peregrine has a resource scheduled for CH-6 by the end of Q2.

The valuation was conducted by WWW International Diamond Consultants, a company that’s familiar with Canadian projects and currently evaluating diamonds for Gahcho Kué in the NWT. JV partners De Beers (51%) and Mountain Province Diamonds TSX:MPV (49%) plan to use the data in a feasibility update scheduled for release by the end of March. Gahcho Kué’s expected to become Canada’s next diamond mine.

Read more about diamond mining and exploration in Canada here and here.

Alberta most attractive mining destination in Canada, third worldwide

March 3rd, 2014

by Cecilia Jamasmie | March 3, 2014 | Reprinted by permission of

Alberta most attractive mining destination in Canada, third worldwide

Oilsands development in northern Alberta.


For the second consecutive year, Alberta—home to the booming and controversial oilsands industry—ranked first in the country and third worldwide as the most attractive jurisdiction for mining investors in the Fraser Institute’s annual global survey of mining executives.

The study, released March 3 as the Prospectors and Developers Association of Canada convention kicked off in Toronto, is based on input from 690 mineral exploration and development company executives.

Sweden and Finland scored the top places in this year’s survey, which spotlighted 112 jurisdictions worldwide. Kyrgyzstan and Venezuela were named the worst two countries to venture.

“Miners praise Alberta for its transparent and productive approach to mining policy. The province offers competitive taxation regimes, sound legal systems and relatively low uncertainty around land claims. That’s what miners look for,” said Kenneth Green, Fraser Institute senior director of energy and natural resources.

Two other Canadian jurisdictions—New Brunswick (7), and Newfoundland and Labrador (9)—ranked in the top 10 worldwide, followed by Saskatchewan (12), Yukon (19), Quebec (21), Manitoba (26), Ontario (28), Nova Scotia (29), British Columbia (32), Nunavut (44) and the Northwest Territories (47).

Quebec, once the darling of mining investors, continued to fall down the rabbit hole. From 2007 to 2009, the French-speaking district topped the survey, then dropped to fifth in 2011, 11th in 2012 and finally 21st worldwide in 2013, due in part to amendments to Quebec’s mining act and recent tax policy changes.

“If Quebec wants to renew confidence in the global mining sector, it should reduce red tape, minimize the risk associated with policy changes and tax increases, and respect negotiated contracts,” Green said.

B.C. dropped to 32nd from 31st in 2012, though the survey recorded improved perceptions regarding the western province’s political stability and availability of labour and skills.

The Canadian public policy think tank also identified the 10 places mining enthusiasts should avoid. From the bottom, they are Kyrgyzstan, Venezuela, Philippines, Argentina (La Rioja and Mendoza), Angola, Zimbabwe, Ivory Coast, Indonesia and Madagascar.

Reprinted by permission of

Zimbabwe may have to stop producing diamonds

December 10th, 2013

by Cecilia Jamasmie | December 10, 2013 | Reprinted by permission of

Zimbabwe, one of the world’s top diamond-producing countries, may soon have to wave its gem extraction industry goodbye as miners operating at Marange and Chiadzwa fields claim it has become economically unviable for them to dig any deeper for the precious stones.

Zimbabwe may have to stop producing diamonds

Diamond miners claim they have neither the expertise nor the resources to search for deposits underground. (Screenshot from Voice of America video)

According to the state-run Herald newspaper, Mines Minister Walter Chidhakwa was told last week that alluvial diamonds—which are easily extractable through open cast mining—have run out and existing miners say they have neither the expertise nor the resources to search for new deposits underground.

If confirmed, the news could be devastating for the southern African nation’s economy, which is counting on its diamonds to boost its weak economy, hurt by years of mismanagement and corruption.

Zimbabwe ranks today among the world’s top 10 diamond producers, with the government holding a 50% interest in most of the Marange mining operations.

Since their discovery in 2006, the country’s alluvial diamond deposits have been heavily extracted, providing generous revenues to miners and the government. But as the resource is depleting, revenue has begun to decline.

The director of Anjin Investments, one of the seven companies licensed to mine diamonds in Chiadzwa, told the paper his firm is operating below the break-even point.

“Our ore is much deeper to depths of about 40 metres and some of the areas we have had to abandon mining because it was no longer commercially viable,” he said.

The Marange diamond fields, 400 kilometres east of the capital Harare, have been a focus of controversy since 20,000 small-scale miners invaded the area in 2008, being removed later by soldiers and police.

Human rights groups say up to 200 people were killed during the process, charges denied by the previous coalition government formed by President Robert Mugabe and long-time opponent Morgan Tsvangirai.

Reprinted by permission of