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Lucapa Finds Angola’s Largest Diamond Ever

With the US and much of Canada out on holiday on Monday, little news hit the market. But over in Australia at least one company picked up some of the slack. Lucapa Diamond Company (ASX:LOM) said it’s recovered a 404.2-carat diamond from its Angola-based Lulo project.

Lucapa has already recovered three other gems of over 100 carats at Lulo, but Monday’s is by far the largest — the runner up, recovered earlier this year, measures just 133.4 carats. What’s more, Monday’s stone is also the largest diamond ever recovered by an Australian company, and has already been confirmed as a Type II, D-color stone.

However, perhaps most impressive is the fact that the gem is the largest diamond ever found in Angola, and the 27th-biggest diamond in the world. According to Lucapa, until now the largest diamond found in Angola was the 217.4-carat Angolan Star, which was recovered in 2007 from the Luarica mine.

Aside from the size of the gem, Lucapa’s discovery is interesting in that it places the spotlight on Angola. Though the African country was the world’s fourth-largest producer of gem-quality diamonds in 2014, it’s often overshadowed by Botswana. Also located in Africa, Botswana was the largest producer of gem-quality diamonds in 2014, with the value of its output coming in at US$17.3 million, far surpassing Angola’s US$7.1 million.

Angola’s reputation as a major diamond producer has also been marred in the past by its connection to blood diamonds. As recently as last year, the country was dealing with the repercussions of a book that “revealed killings and torture in the country’s diamond fields.” However, it’s clear that the country is looking to shed that image.

Case in point: Lucapa is partnered on Lulo with Angolan national diamond company Endiama, as well as Rosas & Petalas, and Antonio Carlos Sumbula of Endiama was adamant on Monday that Angola would like to deliver more discoveries like the one just announced. “The Lulo diamond field is an example of what we would like to showcase to the world to encourage international investment in Angola’s diamond mining industry,” he said.

For his part, Stephen Wetherall, chief executive of Lucapa, certainly seems to believe that Lulo will be able to offer more of the same. He commented Monday, “[w]e have always emphasised the very special nature of the Lulo diamond field and this recovery — together with the other 100 carat-plus diamonds recovered this year alone — is further evidence of that.”

He added, “[a]nd while we continue mining these exceptional alluvial gems from Mining Blocks 6 and 8 at Lulo, we are also continuing to advance our systematic exploration program to find the kimberlite source of these diamonds.”

Unsurprisingly, investors are also pleased about the news, with their enthusiasm sending the company’s share price rocketing upward. Directly after the news was released, Lucapa’s share price leaped to AU$0.45, up 40.625 percent from Friday’s close. Since then it’s declined, but was still at an impressive AU$0.41 at close of day Monday.

 

Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article. 

Related reading: 

3 Big Diamonds in the News This Week

Lucara and Lucapa Diamond Announce Gem Finds

Lucara Diamond Soars on Major Discovery


Lucapa Obtains 35-year Diamond Mining License in Angola

Lucapa Diamond Company Ltd. (ASX:LOM) announced that it has signed agreements to obtain a 35-year license to mine alluvial diamonds at its Angola-based Lulo diamond concession.

As quoted in the press release:

The mining licence is the culmination of six years of continuous investment in exploration and bulk sampling programs for kimberlite and alluvial diamonds at Lulo and represents the most critical milestone yet towards Lucapa’s goal of building a premium diamond mining house.

The mining licence covers a 218km2 area within the 3,000km2 Lulo Diamond Concession, which includes more than 50km of the Cacuilo River, its valleys and terraces.

Click here to read the full Lucapa Diamond Company Ltd. (ASX:LOM) press release.


Billionaire’s Diamond Deal May Spur Interest in Angola

Bloomberg reported that Israeli billionaire Lev Leviev has made a deal with Angola that will allow him to charge more for the diamonds mined at his Luminas mine. Essentially, he will be able to sell the gems on world markets rather than selling them to specific traders from China and Dubai.

The news outlet speculates that the move may renew other miners’ interest in Angola.

As quoted in the market news:

The deal may allow Leviev to raise prices by as much as 50 percent, according to two of the people. Stones from Catoca, the world’s fourth-biggest mine, are sold through Angola’s Sodiam state marketing unit to preferred buyers at an average of about $100 a carat, while they can fetch about $150 on the world diamond market, they said.

A spokeswoman for Leviev Group declined to comment. Antonio Freitas, a spokesman for Angola’s state-owned diamond company Endiama EP in Luanda, and Ari de Almeida, commercial director for Sodiam, didn’t respond to e-mailed requests for comment.

Click here to read the full Bloomberg article.


De Beers Plans Return to Angola Diamond Exploration

Reuters reported that according to Francisco Queiroz, Angola’s geology and mines minister, the country plans to approve a new concession that will allow major miner De Beers to explore for diamonds.

As quoted in the market news:

London-based De Beers, majority-owned by global miner Anglo American, previously explored in Angola between 2005 and 2012 but relinquished its concession.

‘The company made that big investment in prospecting, and unfortunately it didn’t have great results, but it is making a new bid, and another investment will be approved,’ Queiroz told the Reuters Africa Summit on Thursday.

Click here to read the full Reuters report.


De Beers Sets Sights on Angola and India

Reuters reported that by the end of the year, De Beers hopes to obtain a concession to explore in Angola. The major diamond miner is also speaking with India about “exploring in some areas in the centre-north of the country.”

As quoted in the market news:

‘We expect to have news about exploration licenses before the end of this year and we are in contact with the Angolan government to discuss that. We hope that it’s going to be successful,’ [chief executive Philippe] Mellier told Reuters in an interview last week.

Early stage work in Angola should start later this year, a spokesman for the company added.

Click here to read the full Reuters report.


Study: Angola Should Emulate Brazil, Canada to Grow Diamond Industry

Reuters reported that according to a study put out by Eaglestone, an investment bank, Angola’s diamond industry has “huge” growth potential, but will be unable to tap into it if the country does not make geological data more accessible. It would also benefit from developing “transport links and services for mining companies.”

As quoted in the market news:

In 2011, the government introduced a new mining code intended to boost exploration for diamonds and other minerals and help diversify an economy that depends heavily on oil.

The study said the code was a step in the right direction, but that more was needed, including reliable transport links, which were improving, but too slowly.

Angola should also emulate Brazil and Canada, where public availability of basic geological information has boosted development, the study said.

Click here to read the full Reuters report.


De Beers Plans to Dig Angola Mine to Recoup $250M Expense

Bloomberg reported that the world’s biggest diamond producer, De Beers, said it is very confident that it will find a substantial gem deposit in a concession near Lucapa in the Lunda North province, in Angola.

As quoted in the market news:

The results of evaluation studies of three ore bodies known as kimberlites at Mulepe, about 800 kilometers (500 miles) east of Luanda, are expected in about two months, and will be followed by meetings with Endiama to decide how to proceed, Lago de Carvalho said.

Click here to read the full Bloomberg report.


Lonrho Unearths Large Diamond In Angola

Bloomberg reported a diamond bigger than the Koh-i-Noor has been unearthed by Australia’s Lonrho Mining Ltd. (ASX:LOM) in Angola.

As quoted in the market news:

The 131.5 carat diamond was the bigger of two stones discovered since the Lulo project near the Cuango river in northeastern Angola was started two years ago, Perth-based Lonrho said today in a statement. The other was a 38.3 carat stone that made it the third-biggest diamond found from the site, Lonrho said. A carat is a fifth of a gram.

Click here to read the full Bloomberg report.


Angola to Focus on New Diamond Mines on Higher Prices

Bloomberg reported Angola said it will focus on new diamond mines on higher demand.

As quoted in the market news:

Endiama EP, Angola’s state-owned diamond company, will focus on finding new diamond deposits following a surge in gem prices that has spurred foreign investor interest in the industry, Angop said, citing Chairman Antonio Carlos Sumbula.

Click here to read the full Bloomberg report.


Production and Investment Forecasts of Angola’s Mining Industry

Companiesandmarkets.com reported the Angolan mining industry generated $1.1 billion in export.

As quoted in the press release,

The diamond mining sector is the single largest sector in Angola’s mining industry. It accounted for 95 per cent of the country’s mineral export receipts. Angola’s diamond production rose sharply between 2000 and 2010 following the end of civil war and increased mining activities. Angola’s abundant diamond reserves, estimated to be worth approximately 180.0 million carats, are located in the Lunda Sul and Lunda Norte provinces in the central and north eastern parts of the country.

Click here to read the Companiesandmarkets.com press release.


Metalex Says May Have Found Source of Major Angolan Gem Field

Mining Weekly reported Metalex Ventures (TSXV:MTX) said it found a kimberlitic rock in Angola that could be the source of nearby gems.

The market news is quoted as saying,

 Metalex said it intersected kimberlites, the rock that hosts diamonds, and kimberlitic crater infill from 19.8 m to 154.8 m from the surface.

The geophysical target lay in the floodplains of the Cuango river valley, and was seven hectares in size, the company said.

For the complete market news, click here.


Trans Hex to Exit Two Angolan Diamond Projects as Talks Over Funding Stall

Bloomberg reports Trans Hex Group Ltd. (JNB:TSX,PINK:TRHXY) said it plans to exit the Fucauma and Luarica projects in Angola.

The market news is quoted as saying,

“Exit discussions are underway” between the partners about the projects the Cape Town-based company said in an e- mailed response to questions today. The two mines halted production in May 2009 when Trans Hex and its partner, Endiama EP, mothballed the operations in response to the global financial crisis, which led to a slump in diamond demand.

For the complete market news, click here. 


Angola Boosts Security at Border With Congo to help Protect Diamond Fields

Bloomberg reports Angola is working to boost border security in the diamond-rich Lunda Norte province.

The market news is quoted as saying,

Officials are struggling to protect the 770-kilometer (478- mile) land border and 120-kilometer river border with the Democratic Republic of Congo, Muangala said in an interview yesterday in Luanda, the capital.

For the complete market news, click here.


Plan to Increase Diamond Production at IGE’s Angola Mine Implemented

Israeli Diamond Portal.com reports that IGE intends to step up diamond production at their Cassanguidi mine.

The story is quoted as saying:

 The action plan calls to consolidate the mine’s two processing plants; increase its production capacity; and review the mine’s operating hours. In addition, equipment from the company’s sampling operating in South Africa will be transferred to the Angola site – an essential move, as the company experienced several equipment failures at Cassanguidi during the fourth quarter of 2010.

To access the full story, click here.


Zimbabwe May Allow Angolan Companies to Explore for Diamonds

Israeli Diamond Portal.com reports that the governements of Zimbabwe and Angola are in discussions regarding permission for Angolan companies to search for diamonds.

The story is quoted as saying:

The AngolaPress news website reports that following a meeting with the Angolan Development Bank’s board of directors, Ozias Hove told press that the “good friendship ties” existing between Angola and Zimbabwe could allow such an arrangement

To access the full story, click here.


Trans Hex Group Inks Angolan Diamond Contract

Trans Hex Group Ltd, a diamond company registered in South Africa has announced the contract finalization for the Luana concession in Angola. Aside from this new contract Trans Hex has two other mines in Angola, the Luarica and Fucauma operations, both of which are operational.

The new partner is Angolan state-owned diamond company Endiama which holds a 39 percent stake in the Luana mine.  Trans Hex now owns 33 percent.

Click here to access the entire news


Lucapa Diamond Company – More Large Diamonds at Lulo

Lucapa Diamond Company Limited (ASX:LOM) (“Lucapa” or “the Company”) and its partners, Empresa Nacional de Diamantes E.P. (“Endiama”) and Rosas & Petalas, are pleased to announce the recovery of more large diamonds from the Lulo Diamond Project in Angola.
As quoted in the press release:
The latest recoveries of large Specials (>10.8 carats) include Type IIa diamonds weighing 83 carats and 68 carats. In addition, recent recoveries include five other +50 carat diamonds.

10 Top Diamond-producing Mines

The story of the modern diamond market begins in 1871, when the De Beers and Kimberley mines were discovered in South Africa. That milestone helped De Beers, now owned by Anglo American (LSE:AAL), become the world’s largest diamond producer.

Despite some volatility in the market, global demand for diamonds has remained strong. According to Morgan Stanley (NYSE:MS), worldwide supply of rough diamonds is expected to expand to meet that demand between 2016 and 2021, driven by growth mainly in Canada and Russia. Overall, prospects for the market look bright.

But where are most diamonds being mined today? Read on for a brief overview of the world’s 10 top diamond-producing mines by output and value, based on 2016 data compiled by expert Paul Zimnisky. You can also click here to read about the five countries that produce the most industrial diamonds. 

1. Jwaneng, Botswana

Production: 11,975,000 carats

Value: $2,347 million

Jwaneng is the richest diamond mine in the world by value. The mine became fully operational in August 1982 and is owned by De Beers and the government of Botswana. Production normally varies between 11 and 15 million carats per year. De Beers plans to invest $2.2 million in a seven-year expansion project to extend the mine’s life beyond 2040.

2. Jubilee, Russia

Production: 11,975,000 carats

Value: $1,431 million

ALROSA (MCX:ALRS) estimates that its Jubilee mine will produce 9.2 million carats worth $1.4 billion in 2017; that amount represents 9 percent of global diamond output by value. The company’s portfolio includes 11 diamond mines and five alluvial operations that together account for 27 percent of global diamond production by volume and 33 percent by value.

3. International, Russia

Production: 3,948,000 carats

Value: $829 million

Since 1999, the International mine has been operated by ALROSA. It is characterized by very high diamond grades of up to 8.09 carats per ton. The underground mine is expected to run until 2022 at a design capacity of 500,000 tons of ore per year.

4. Orapa, Botswana

Production: 7,931,000 carats

Value: $753 million

Orapa, another joint venture between De Beers and the Botswana government, is a conventional open-pit mine that was discovered in 1967 and became fully operational in July 1971. Currently, Orapa is being mined at a depth of 250 meters, and is expected to reach 450 meters by 2026.

5. Debmarine, Namibia

Production: 1,169,000 carats

Value: $585 million

De Beers’ offshore mining operation, Debmarine, produces over half of Namibia’s diamonds by volume and value. Debmarine is currently the only large-scale marine mining operation in the world, with a fleet of five specialized marine mining vessels that screen material recovered from the ocean floor at depths of 90 to 140 meters.

6. Catoca, Angola

Production: 6,700,000 carats

Value: $570 million

Catoca is owned by four entities, primarily Endiama, Angola’s state diamond miner, and ALROSA. This year it is expected to produce 6.5 million carats worth over $600 million. Catoca is the world’s fourth-largest diamond mine in terms of production and accounts for almost 70 percent of Angola’s diamond output.

7. Nyurbinskaya, Russia

Production: 5,001,000 carats

Value: $565 million

Nyurbinskaya is another of ALROSA’s diamond mines. It has been operated by Nyurba, one of the company’s youngest mining and processing divisions, since 2001. This open-pit mine has a current depth of 290 meters, and it located at the Nakyn ore field, which also includes the Botuobinsky open pit and two alluvial placers.

8. Diavik, Canada

Production: 6,658,000 carats

Value: $539 million

Rio Tinto (ASX:RIO,LSE:RIO,NYSE:RIO) operates and owns a 60-percent interest in the Diavik diamond mine in Canada’s Northwest Territories. Diavik commenced production in 2003, and produces some 6 to 7 million carats annually; diamonds at the mine are predominantly large, white and gem quality. Since production began, Diavik has produced 100 million carats of high-quality rough diamonds; the current mine plan has output continuing to 2024.

9. Ekati, Canada

Production: 5,200,000 carats

Value: $463 million

Dominion Diamond’s (TSX:DDC,NYSE:DDC) Ekati mine was Canada’s first surface and underground mine, and has produced approximately 67.8 million carats since it began operating in 1998. Like Diavik, it is located in the Northwest Territories. The largest gem-quality diamond produced to date at the mine is a 186-carat diamond that came from the Pigeon pit; it was recovered and sold in 2016.

10. Mir, Russia

Production: 3,191,000 carats

Value: $463 million

Although open-pit mining at this operation ended in 2004, ALROSA built a series of underground tunnels at the site, and they have continued to yield high-quality rough diamonds. Diamond content at the mine is high, and the average diamond grade exceeds 3 carats per ton. Reserves at Mir are sufficient to continue mining with a design capacity of 1 million tons of ore per year until 2043.

Don’t forget to follow us @INN_Resource for real-time news updates!

Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.


Kimberlite Pipes: What They Are and How They’re Formed

Experts believe that four processes are responsible for creating nearly all the natural diamonds that have been found at or near the surface of the Earth.

The gems can be formed in the Earth’s mantle, in subduction zones, at impact sites and even in space. However, the first process is by far the most common, and it is the only one that can lead to the creation of gem-quality diamonds. The other three are responsible only for the formation of small quantities of commercial diamonds.

Diamonds that originate in the mantle are created when heat and pressure transform carbon. The mantle is nearly 100 miles below the Earth’s surface, and gems that come from there are brought to the surface by kimberlite pipes, which are formed by deep-source volcanic eruptions.

For that reason, diamond exploration companies focus on hunting for kimberlite pipes. Searching often takes years or even decades as only about 1 percent of known kimberlite pipes worldwide contain economic concentrations of diamonds. However, companies that are able to unearth them can go on to find incredible riches. Read on for a quick look at how kimberlite pipes are formed, what they are made of and where they are found.

Kimberlite pipes: How they form

As mentioned, kimberlite pipes are believed to have been formed by deep-source volcanic eruptions. Jeffrey Post, a diamond expert at the Smithsonian, has described these eruptions as “quite violent.”

“We haven’t seen such eruptions in recent times,” he says in a Q&A on diamond formation. “They were probably at a time when the earth was hotter, and that’s probably why those eruptions were more deeply rooted. These eruptions then carried the already-formed diamonds from the upper mantle to the surface of the Earth.”

Indeed, some estimates place the last kimberlite pipe eruption at around 40 million years ago. That has made it tough for experts to determine exactly how they occurred. However, the consensus is that these eruptions happened fairly quickly — their journey from the mantle is estimated to have taken hours, not days or months as is the case with magma and lava from a volcano.

Explaining, Post says, “if [the pipes] were traveling too long and too slowly they would have literally turned into graphite along the way. And so by moving quickly they essentially got locked into place into the diamond structure.”

He adds that the pipes may have moved to the surface at a rate of 20 to 30 miles an hour. Some believe that the only way for magma to rise so quickly is if the melt is supercharged with gas; however, nobody has found out where such gas might come from. 

Kimberlite pipes: The role of carbon

Experts are also not sure where the carbon that diamonds form from originates. Geology.com notes that most likely it was “trapped in the Earth’s interior at the time of the planet’s formation.”

Explaining further, Post comments that in some cases it seems like the carbon originated in the mantle, while in others it appears to have come from near the Earth’s surface. In the latter case, the carbon “could have literally been carbon that was part of carbonate sediments or animals, plants, shells, whatever, that was carried down into the upper mantle of the Earth by the plate tectonics mechanism called subduction,” he says.

As is mentioned above, the intense heat and pressure of the mantle combine to transform this carbon into diamonds. Put very simply, each carbon atom bonds to four other carbon atoms, creating a very strong connection; it’s because of this strength that diamonds are so hard. As more carbon atoms come into the vicinity of the bonded carbon atoms, they too attach. Eventually, once enough carbon atoms have attached to one another, diamonds are formed.

Colored diamonds are created when foreign particulates are trapped during the diamond crystallization process. Traces of different material result in different hues, as well as different hue intensities. For example, blue diamonds, which are incredibly valuable, are created when boron is introduced in the diamond formation process — it bonds to the carbon atoms, absorbing the red, yellow and green areas of the color spectrum.

Kimberlite pipes: Where they are located

Kimberlite pipes were first found near Kimberley in South Africa, but since then they have been found on most continents. Of course, as has already been noted, not all kimberlite pipes are created equal and only a small percentage of them contain diamonds.

So where should diamond exploration companies look if they want to find kimberlite pipes that contain diamonds? Major diamond mines can be found in South Africa, Botswana, Angola, Russia, Canada and Australia, so starting there is a good bet.

That said, simply showing up in a country that produces diamonds and hoping for the best is not a sound approach. When a company has found a site that it believes may hold diamonds, one thing it may do is look for minerals that are associated with kimberlite pipes. These minerals include garnet, clinopyroxene, orthopyroxene, olivine, spinel, ilmenite, magnetite, rutile, and zircon.

A member of the garnet family called pyrope is one of the best minerals to find when looking for diamonds. A rare form of pyrope called chrome-pyrope forms under the same temperature and pressure as diamonds, meaning that if it is present there is a good chance that a kimberlite pipe with diamonds in it is nearby.

Companies on the hunt for diamonds have other techniques they use to explore, but in general it takes longer to find diamond deposits than it does to find deposits of resources like gold and silver. It is also usually more expensive, though the payoff can certainly be high in the end. To learn more about the process through which companies find kimberlite pipes containing diamonds, click here.

This is an updated version of an article originally published by the Investing News Network on October 25, 2014.

Don’t forget to follow us @INN_Resource for real-time news updates!

Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.


Global Rough Diamond Production About to Reach its Peak

Despite the recent opening of two new mines, global rough diamond production will reach its peak by 2019 and there will be a supply deficit only a year after that, two separate reports published this week show.

Global rough diamond production will reach its peak in only three years before entering into a supply deficit by 2020, two separate reports show.

According to one of them, unveiled Wednesday by consulting group GlobalData, production of rough diamonds will increase from 127 million carats last year to 134.5 million carats by 2020, a compound annual growth rate of 2.1%.

Such growth will be supported by the expansions at operating mines including Lukoil Oil Company’s Vladimir Grib project in Russia, the Diavik and Ekati Diamond mines in Canada, and Rio Tinto’s Argyle mine in Australia, said Cliff Smee, GlobalData’s head of research and analysis for Mining.

But from 2019 onwards, output will begin to decline due to depleting reserves at Argyle, Diavik and Ekati, which accounted for roughly 18% of global production this year.

The expected supply deficit could be worsened by the fact that 47% of global diamond production comes from countries of high political risk, including the Democratic Republic of Congo and Russia, the report says. Supply could fall below projected levels if political disruption affects projects in those countries, it adds.

Global rough diamond production about to reach its peakAnother report, published earlier in the week by Bain & Company, expects rough diamond output to rise sharply in 2017 after stagnating for the best part of a decade. The analysts see global production increasing to around 150 million carats by 2019, before declining over the following decade by an average of 1% to -2% a year.

New supply from the Luaxe mines in Angola will be partly offset by likely delays in the operations at the Bunder mines in India and the shutting down of De Beers’s Snap Lake in Canada, the analysts added.

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