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According to some estimates, the $70 billion-plus diamond industry employs up to 10 million people globally, directly and indirectly. Most of my readers, from many different backgrounds, owe their livelihoods and wealth to diamonds. But many people in diamonds are specialists of sorts, with a great deal of knowledge of their own particular area of the pipeline, but with a limited view of the scope of work that others in the industry undertake every day. In my next series of articles, I will take a closer look at some of the professions in the diamond industry with which many may be unfamiliar. Very few people have a complete picture of what it takes to extract these precious stones from the earth, and eventually turn them into a beautiful piece of diamond jewelry.
In past articles, I have explained the diamond pipeline’s many steps, from grassroots exploration to rough sales, manufacturing, and eventually retail. I will now follow the same path, but will outline some of the important jobs that must be done to help the process move along smoothly and bring these diamonds to market.
The very first step in this process is the exploration and discovery of the mine. Like looking for any precious metal or mineral, diamond exploration is principally the job of geologists, geo-technicians, and hydro-geologists. Their job is to identify areas in the world where the conditions are right to find diamonds, and then using the technologies available to them, to go and identify high-priority targets. Some years ago, geologists determined that the earth’s cratons were the right place to look for kimberlite deposits, since these ‘shields’ of thick surface rock tend to provide the necessary incubation for diamonds below the surface. Interestingly, it was this knowledge that led a small team of geologists to hunt for diamonds in northern Canada, when many people thought they were crazy. It turns out they were right, and the country is now one of the world’s top diamond producers.
A senior geologist typically oversees the initial planning process. Their job is to gather as much information as possible about a potential exploration site. This often means combing through publically-available data from all levels of government, which is often based on the previous exploration work of other geologists, much of which is in the public domain. They might also sift through private exploration work from other companies who have looked in the same area in the past. Their job is to combine as much detailed information as possible, in an attempt to create a picture that might help narrow their search. Once a favorable location is determined, the geologist must secure the mineral rights with local, regional, and/or federal governments to allow mineral prospecting to take place.
The next step in exploration is reconnaissance, and this is principally the job of a geo-technician. A geo-technician is a civil engineering scientist who specializes in identifying geological anomalies within the earth’s crust. A kimberlite pipe is a perfect example of this kind of anomaly, where the kimberlite rock will look different from the surrounding rock. To someone with a trained eye and the right equipment, this is a good clue. The reconnaissance process typically involves a host of methods, including surface sampling, satellite and aerial photography, and magnetic field analysis. It is rarely as simple as identifying a target and drilling it, and the geo-technician must combine enormous amounts of data into a concise picture to further narrow in on a prospective target.
The geo-technician is not usually looking for diamonds, but rather the indicator minerals that suggest a diamond deposit is near. Certain types of minerals are formed in the same part of the earth as diamonds, and come along for the ride within a kimberlite intrusion. It is the job of the geo-technician to identify and catalogue these other minerals, and using highly sophisticated analysis, to determine if the mineral composition is right for a potential diamond discovery.
Diamond exploration often requires the use of hydro-geologists and hydrologists to further refine the search. A hydro-geologist studies the way that groundwater moves through the soil and rock of the earth. A hydrologist, by comparison, studies how surface water carves its path along the surface of the earth. These two professions can help us to work backwards to a potential diamond source, by analyzing the content and mineralogy of ground and surface water from streams, lakes, and rivers in the area. This is important in almost all of the major diamond exploration areas in the word right now. In the northern climates of Canada and Russia, glacial action left behind countless lakes and rivers that all hold a key to the diamonds underneath, and several major diamond deposits have been found underneath lakes. In southern Africa, areas that once served as large tidal basins have carved out rivers to the oceans, where much of the world’s oceanic diamond mining now takes place.
If the stars align and a prospective kimberlite deposit is found, it must be drilled to determine if diamonds are present in economic quantities. This means assembling a drill rig, and with it come a host of construction and engineering specialists to direct the drilling. This is a time-consuming and expensive process that can often contribute up to 50 percent of the cost of exploration. Many people are needed for this process, and small mining camps must often be established. At the same time, construction crews often take large surface samples using heavy earthmoving equipment.
If a target is confirmed to be a kimberlite and a sample taken, it is a geo-statistician who is involved in analyzing the results. The role of these professionals is to use the small amount of diamond recovery from sampling, and extrapolate what the larger deposit might contain using statistical algorithms. This includes different variables such as the grade of the ore body (meaning the amount of diamonds per unit of rock), and the likelihood of it containing a large enough deposit of diamonds to make it economic. Small samples usually only contain very small diamonds, often smaller than one millimeter in diameter. However, the geo-statistician can capitalize on the lognormal relationship of diamond size to infer if larger diamonds could be present. This is an important job, since diamond drilling and sampling are expensive. There are many examples of companies that have gone bankrupt by spending too much money drilling targets that were never likely enough to be viable in the first place.
The exploration process is time consuming and expensive. Finding a target can take years of work, and years more before the margin of confidence is high enough to spend millions of dollars to build a mine. The work of these geology professionals is challenging, and akin to finding a needle in a haystack. Despite their skills, the job often requires a lot of luck, as diamond mines are exceedingly rare and hard to find. If they are successful, and manage to locate a viable diamond mine, the next job is to put together a sound economic study to determine if the deposit can be profitably mined, and to estimate the costs and returns of the project. Although the geology team is involved in the study, it is more the work of civil engineers, who I will talk about in my next article.
The views expressed here are solely those of the author in his private capacity. No one should act upon any opinion or information in this website without consulting a professional qualified adviser.
Diamond industrialist Ehud Arye Laniado is a man passionate about diamonds. From his early 20s in Africa and later in Belgium honing his expertise in forecasting the value of polished diamonds by examining rough diamonds by hand, till today four decades later, as chairman of his international diamond businesses spanning mining, exploration, rough and polished diamond valuation, trading, manufacturing, retail and consultancy services, Laniado has mastered both the miniscule details of evaluating and pricing individual rough diamonds and the entire structure of the diamond industry. Today, his global operations are at the forefront of the industry, recognised in diamond capitals from Mumbai to Tel Aviv and Hong Kong to New York.