Despite the distinction of being the largest producer of diamonds by volume, churning out around one-quarter of the world’s supply, the Argyle mine accounts for an estimated market share of only 6% by value. Most of the stones produced by the Western Australian mine are of relatively low quality, with an estimated long-term price of just US$12 per carat. However, the bulk of Argyle’s production is readily absorbed by India’s cutting factories, where it is transformed into small, inexpensive polished diamonds of under US$200 per carat wholesale, for the mass market.
In late 2000, London-based
De Beers initiated the bidding war over Ashton as it sought to diversify its geographic base, while complementing and completing the range of diamonds offered to its clients. Until 1996, most of the diamonds produced by Argyle were sold to the Central Selling Organization (CSO) of De Beers. In June 1996, the Argyle joint venture chose not to renew its sales agreement with De Beers and decided, instead, to sell its diamonds directly to customers through Argyle Diamond Sales (ADS), a wholly owned entity which markets both rough diamonds and a small quantity of polished stones. ADS’s customer base includes both manufacturers and dealers of rough diamonds, primarily from India.
Rio Tinto stepped into the bidding fray amid concerns that De Beers intended to terminate Ashton’s existing marketing arrangement in relation to its share of production from the Argyle mine. There were fears that this action would significantly weaken ADS and precipitate a fall in Argyle diamond prices. The Ashton takeover cost Rio US$432 million (including assumed debt) to preserve its single-stream marketing of the Argyle stones. In May 2001, Rio launched a A$2-per-unit cash offer for the remaining 0.2% of the Argyle mine held publicly through the Western Australia Diamond Trust.
The Argyle mine is 120 km south of Kununurra in the Kimberley region of northeastern Western Australia. The mine operates on a fly-in/fly-out basis from Perth. Diamonds are sourced from open-pit mining of the large AK1 lamproite pipe, and from alluvial gravel deposits eroded from the pipe in the nearby Smoke and Limestone creeks. Production from alluvial deposits began in 1983, followed by production from AK1 in 1986. The two operations have separate processing plants.
Diamond production from the Argyle mine for the nine months ended Sept. 30, 2001, exceeded 18.1 million carats, compared with 20.9 million carats for the corresponding period in 2000 and 26.5 million carats for the whole of 2000. Rio Tinto recovered 17.5 million carats from the AK1 open pit in the first nine months of 2001 after processing 7.8 million tonnes of ore grading 2.24 carats per tonne. Alluvial mining operations accounted for 667,000 carats from the treatment of 3.2 million tonnes grading 0.21 carat per tonne. The alluvial mine has a limited life and Rio has hinted that its days are numbered.
Reserves at March 30, 2001, stood at 60.1 million tonnes grading 3 carats per tonne, enough to sustain open-pit mining through to 2007. The waste-to-ore stripping ratio is 4.2-to-1. Additional resources total 168 million tonnes grading 2.8 carats per tonne.
A feasibility study has indicated the viability, at current diamond prices, of mining some 66.2 million tonnes grading 3.08 carats per tonne by block-caving underground mining methods below the open pit at an average of 5 million tonnes per year. This will extend the life of the Argyle mine to at least 2018. The initial capital investment to go underground and begin production in 2006 is estimated at A$280 million. Recent diamond drilling has demonstrated that “good diamond values” continue to depth, indicating the potential for further expansion down the road.
Discovered in 1979, the Argyle diamond deposits are found near the eastern margin of the Proterozoic Halls Creek Mobile zone. A shallow-to-moderately-dipping Lower-to-Middle Proterozoic sedimentary sequence surrounds the AK1 pipe. The sediments overlie granite and basement migmatite, and are divided into four formations consisting mainly of sandstones and siltstones. The AK1 body is believed to have been emplaced close to the time of the formation of the sedimentary sequence.
AK1 pipe
The AK1 pipe or diatreme is an elongated olivine lamproite body, measuring 2 km long and varying in width from 150 to 500 metres. It consists of a main, westerly dipping, southerly plunging body and a northern cone-shape body (the Northern Bowl), which are connected by a narrow neck known as “The Gap.” A distinct, narrow, steeply dipping appendage called the Southern Tail occurs at the southern end and strikes southwest. The geometry is structurally defined by post-intrusion faulting and regional tilting. The pipe has been drill-tested to a depth of 1,100 metres below surface and remains open.
Two distinct lithologies are recognized, the sandy tuffs and non-sandy tuffs. The sandy tuffs are a major component of the diatreme rocks, while the lower-grade non-sandy tuffs are restricted to the core of the Northern Bowl. Locally, diamond grades can be quite variable, with higher-grades favouring the southern portions of the pipe. Grades tend to be lower toward the contacts of the pipe.
The AK1 open pit is 2.5 km long in a north-south direction and 2 km wide. During the past two years, the west wall was pushed back so that the pit could be deepened. At times, the development work restricted mining of higher-grade areas. A second major cutback of the pit, scheduled to begin in late 2001, will further deepen it and extend open-pit mining until early 2007. The pit is mined on 15-metre-high benches using a company-owned fleet of large-scale equipment.
Diamonds are extracted from the lamproite ore by way of a series of size reduction and concentration processes at the rate of 10 million tonnes per year. The ore is progressively reduced in size through a series of staged crushing and screening treatments to produce a nominal top-size material of 15 mm. All material finer than 1.5 mm on the first pass operation is rejected to final tailings.
The plus-1.5-to-minus-15-mm size fraction of the processed ore is treated with heavy media separation (HMS) using dense-media cyclones, plus ferrosilicon to adjust the specific gravity. Liberated diamonds report to the dense component in the cyclone underflow stream, together with other heavy minerals such as garnet and ironstone. The lighter reject “floats” fraction is again processed by screening, re-crushing and HMS to recover any smaller-sized locked diamonds.
The plant tailings are discharged to the tailings dam in two size components. The finer minus-1-mm fraction is pumped as a slurry into the dam, while the coarser fraction is transported by conveyor and truck and added to the dam walls.
X-ray sorters
The diamond-bearing concentrate is processed using X-ray sorters. The diamonds exhibit fluorescence as the concentrate passes through an X-ray beam. Photo-multiplier tubes in the sorters detect this fluorescence, triggering a coordinated air blast that ejects the diamonds, along with any neighbouring heavy minerals, into a final concentrate. The diamond-rich concentrate is then treated with an acid digestion sequence to remove unwanted heavy minerals.
The process plant averaged a diamond recovery of 82% for 2000. In early 2001, a A$28-million capital program was approved, the objective of which is to install crushing equipment aimed at reducing the HMS floats regrind size to 6 mm from 8 mm so that additional fine-sized diamonds can be recovered. Test work on bulk samples of coarse HMS tails suggests that a further 0.24 carat of fine diamonds could be recovered from each tonne of plant feed.
The unit processing costs for 2000 were A$3.81 per tonne, compared with A$4.27 per tonne in 1999. Over the next five years, processing cost
s are forecast to average A$3.90 per tonne. Operating costs, however, do not include water and power costs, which account for another 30%.
The Argyle mine, which is known for its natural pink diamonds, produces less than 10,000 carats of medium-to-large stones a year. These stones vary in shade from light pink to purplish pink and, very occasionally, red. The rarity of these diamonds increases with the intensity of their colour. The highest quality and rarest polished pink diamonds are sold through an annual international tender. The 2000 tender comprised 47 stones weighing 46.4 carats, which brought in A$3.1 million.
Be the first to comment on "Underground plan extends life of Argyle diamond mine"