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From exploration to retail, and all of the supporting services in between, the diamond industry provides a livelihood to millions of people around the world. The work of hunting for, and hopefully discovering, a diamond mine, is the work of geologists and other highly-skilled professionals in similar fields of study. However, once a kimberlite deposit has been found, and sufficiently studied to warrant moving towards an economic feasibility analysis, the work largely shifts to the engineering field. Civil and mining engineers must analyze the location of the deposit, and develop a plan and a budget to build a diamond mine and processing plant. It is this group of professionals on which I will now focus.
Most developed countries will have a national set of standards for disclosure of mineral projects within the country. This ensures that all projects can be evaluated on an equal footing, and also establishes a level of independence between the professionals developing the study, and the mine’s management and ownership. A quick review of any diamond feasibility study will often highlight on the front page a list of many professionals who played a role in the study, or who helped in some way to advance it. Most technical reports will also feature a detailed list of the professional accreditations and qualifications of each individual, and a company representative or ‘qualified person’ often oversees their work. These professionals are principally professional engineers and geologists.
A feasibility study seeks to develop and refine three key items: namely, an estimate of the size of the mineral resource, an estimate of the capital costs to build the mine and the operating costs to run it, as well as an assessment of the impact of mining on the environment and local communities, and the permits necessary to satisfy these requirements. Each pillar requires input from a different group of professionals.
The estimate of a mine’s resource is perhaps the most important part of the feasibility analysis. Designing a mine and ensuring environmental compliance is futile if the resource itself does not contain enough revenue to support development. Resource estimation is the job of a specialized resource geologist. Using sophisticated computer graphing software, the resource geologist must combine all of the known data from drilling and sampling to create a three dimensional model of the ore body. This model establishes the size of the deposit, different rock types within the deposit, as well as any variance of grade, diamond quality, or size frequency throughout.
There are also different standards of disclosure within different countries by which the resource geologist must abide. There are various types of estimates for a resource, based on the relative probability of the estimate being correct. This estimate is based on the amount of sampling in any given region, which helps to develop more certainty about the results. The geologists must combine all of this data to establish how much ore can be included in a mine plan, versus how much can only be classified as a potential upside.
In order to determine the capital cost to build the mine, and the ongoing operating costs, engineers must essentially plan, design, and ‘build’ the mine in a theoretical way. This is the job of process and mining engineers. Mining engineers are the primary designers of a mine. Taking ground topography into account, they will develop a mining plan for an open pit or an underground mine, or a blended combination of the two. They have to determine the most efficient and cost-effective way to get the diamonds to the processing plant, both in terms of the mining itself, but also in terms of the transportation of the ore. There are, of course, many different jobs involved in mining, and the mine engineers must factor all of these costs into an operating budget, often expressed in terms of the cost to mine a unit of ore, such as a metric tonne. Their job doesn’t stop after the feasibility study, as they often supervise the construction of underground mine shafts and tunnels.
A process engineer must design the most efficient method to recover diamonds from the ore once it arrives at a recovery plant. The best recovery method will depend on many variables, including the weather in the area, the type and hardness of the prevailing ore, and access to water, which is used extensively in the diamond recovery process. Process engineers may employ metallurgists, who are materials engineers that specialize in the extraction of minerals from ore.
Assessing the potential environmental impact of a proposed mine is generally the work of a geoscientist. Although this field is very broad, it encompasses professionals whose job is to evaluate the topography of the land in a particular area. While a mine has a relatively large footprint in any landscape, its true impact can often be felt for hundreds of kilometers around its location. The geoscientist must evaluate many variables, including nearby water formations, local wildlife habits and migration patterns, and the potential for other complicating factors, such as topography and elevation changes. The geoscientist must also look at the feasibility of bringing electrical power and road access to the location, which in some cases could come from hundreds of kilometers away, and require significant infrastructure development.
In today’s day and age, with so much focus on the environment, and governments under pressure to ensure that industry respects the ecosystem, the role of the geoscientist in developing an environmental plan is critical. The geoscientist must work closely with local, regional, and federal levels of government to ensure that all concerns are addressed and satisfied. There are many recent examples around the world of mines that have either been altogether scuttled, or significantly delayed, because of a failure to address environmental concerns, especially regarding local wildlife and water systems. The concerns and impact on local inhabitants must also be taken into consideration, and often plans to provide local employment must be put forward.
This is, of course, a simplification of a complex process involving the hard work of many people. If all goes well, and the decision is made to mine the deposit, then the mine plan must progress from a theoretical plan to a real one. I will discuss the occupations involved in mining 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.