RAPAPORT... BHP Billiton Diamond Production Down
BHP Billiton produced only 620,000 carats of rough diamonds during the three months ended March 31, 2008, which was 30 percent less than one year ago and a 26 percent drop from the previous quarter. The company attributed the decrease to the lower carat grade of the ore mined and noted that as the Ekati diamond mine in Canada transitions from open-pit to underground mining, the mix of ore processed will change from time to time. For the year to date, BHP Billiton posted a 7 percent production increase. Approximately 2.49 million carats have been produced at Ekati this fiscal year. The mining giant also reported record production figures for copper, natural gas and alumina.
Rio Tinto to Promote Champagne Diamonds
Rio Tinto Diamonds released its new champagne diamond promotional material to help drive demand, including a brochure and a sales training program. Jewelry manufacturers who are interested in developing champagne diamond collections can arrange to meet with Rio Tinto Diamonds’ marketing team at the JCK Las Vegas show. For more information, call
US +1 6464291624 Call .
Cape Diamonds Extends Loss Into 2008
Cape Diamonds sank deeper into the red in the first half of fiscal 2008, reporting that its net loss increased 24 percent to $3.4 million (GBP 1.7 million) for the six months ended December 31, 2007. Revenues were half the amount generated during the same period of 2007, at $605,204 (GBP 305,690). Concern for the AIM-listed company’s future was fueled by electricity supply problems in South Africa, which forced the Elandslaagte mine to be placed on care and maintenance in December 2007, with electricity generators installed at the plant in February 2008. In the past two months, Masoud Alikhani, the company’s chairman and founder, and Manie Silver, its chief executive officer (CEO), have both resigned.
David Gadd-Claxton, formerly Petra Diamonds’ CEO, was appointed CEO, with Anna Mokgokong assuming the role of acting chairperson.
Namdeb Profits Plummet
Namdeb Diamond Corporation’s net profits for the year 2007 fell 53 percent to $18.4 million. The company, jointly owned by the Namibian government and De Beers, stated that revenue for the year fell 15 percent to $588 million (NAD 4.56 billion) compared to 2006. Profits before tax amounted to $84.4 million (NAD 633 million), down from $159.9 million in 2006, while net profits came to $19.1 million (NAD 143 million) compared to $40.6 million (NAD 305 million) in 2006. Total carats produced came in at 2.2 million, or a 4 percent increase from 2.1 in 2006, with half the diamonds found on land and from marine mining in the Atlantic ocean. Factors driving up production costs at Namdeb included a rise in fuel prices, salary increases and maintenance work required on a seawall due to adverse weather conditions. Sales dropped as a result of a change in diamond mixes combined with the effects of price correction for rough diamonds, according to Namdeb. Namibia is the world’s sixth-largest diamond producer.
Yakutia Natives Confer With Indigenous Alaskans
Four indigenous leaders from the diamond- and oil-rich Sakha Republic in Russia traveled to Barrow, Alaska, to meet tribal leaders, organizations and local residents. The Russian visitors intended to learn how community organizing in Alaska is used for leverage with resource extraction companies and governmental bodies.
In 2006, Vladimir Putin, Russia’s president, approved an East Siberian Pacific Pipeline that would cut right through the southern part of the republic, also known as Yakutia. The 2,600-mile pipeline was designed to pass within one half mile of the shore of Lake Baikal, a UNESCO World Heritage site, with more than 1,700 species of plants and animals, many of which cannot be found elsewhere in the world. Protests against the pipeline’s proximity to the lake finally pushed the route into a different region. In addition to coal mining and the pipeline, a railroad is under construction and plans are underway for an open-pit coal mine in the southern region of Sakha.
SA Mining Production DownSouth Africa’s total mining production decreased 7.3 percent in February 2008, led by a decline in gold production, Statistics South Africa (Stats SA) reported. Diamond production, comprising 8.3 percent of total mining production, fell 25.8 percent, or 38 percentage points, in February in the country’s monthly mining production index report. Gold, which carries a weight of 25.7 percent, dropped 28.2 percent, or 17.6 percentage points. Platinum group metals, making up 27.6 percent of the total, were flat compared to February 2007. For the three months ended February 29, 2008, South Africa’s total mining production declined 5.2 percent from the previous three months, while production fell 6.4 percent compared to one year ago. Diamond production decreased 14.4 percent, or 1.5 percentage points, compared to the previous three months, showing the biggest drop of South Africa’s minerals for the period. Gold production fell 11.1 percent, or 1.5 percentage points, while platinum group metals declined 6 percent, or 2.3 percentage points. Actual production figures were not provided in the report.
Gem’s Second Lesotho Plant To OpenGem Diamonds expects to begin full production at the second plant of its Lesotho-based Letseng mine during the second quarter of 2008. The mid-tier diamond mining company, which owns 70 percent of Letseng in partnership with the Lesotho government, said that construction of the plant is now in its final stages. Sales from the Letseng mine rose 45 percent to 76,873 carats in 2007, and production is expected to reach 100,000 carats this year. The successful conclusion of the commissioning will make it the world’s seventh-largest diamond mine by throughput, according to Gem Diamonds spokespersons. The LSE-listed company decided to build the second plant in October 2006, explaining that the move would halve the life of the open-pit kimberlite mine from 70 to 35 years, increasing its net asset value.
Rio Tinto Production Drops
Rio Tinto’s diamond production fell 34 percent to 3.29 million carats in the first quarter of 2008. The world’s third-largest diamond miner reported that production at its Argyle mine in Australia fell 37 percent to 2.17 million carats during the three months ended March 31, 2008, due to wet weather. At the Diavik mine in Canada, which Rio Tinto owns 60 percent of in partnership with Harry Winston, production dropped 31 percent to 1.07 million carats. Extreme cold temperatures reduced ore recovery and processing. At Murowa Diamonds in Zimbabwe, which Rio Tinto has a 77.8 percent stake in, production increased 333 percent to 52,000 carats. For the quarter, the company achieved record production of iron ore, increasing output by 16 percent to 37.37 million tons.
Angola Diamond Production Up Approximately 5.7 Percent
Angola’s rough diamond production totaled 9.7 million carats in 2007, according to Tiago Dias, the head of strategic planning and investment for Endiama, the country’s state diamond company. Compared to Kimberley Process (KP) statistics on Angola for 2006, production rose approximately 5.7 percent. Dias stated that Angola produced 8.6 million carats from official mines and 1.1 million carats from informal mines, per the Economist Intelligence Unit. Production has grown 59 percent since 2004, and it is expected to pass the 10 million carat mark this year, rising another 3 percent. Most new mine output is coming from the northeastern Lunda Norte and Lunda Sul provinces, although exploration in Malanje, Uíge, Moxico and Cuando-Cubango could open up new mining activity in those areas, Dias noted. He stated that sales in 2007 rose to an estimated $1.27 billion, a 12 percent increase over KP data for 2006. Angola was the world’s fifth-largest diamond producer by value in 2006, according to KP figures.
Article from the Rapaport Magazine - May 2008. To subscribe click here.