Upcoming Diamond Projects – Kao, Braúna, Ghaghoo & Lulo

In our current series of articles, we have been looking at some of the main new sources of diamond supply in the world. These new mines will replace some of the expected reduction in supply, as older mines reach the end of their lifespan in coming years. The mines that I have focused on so far have been somewhat larger projects, with at least one million carats of expected output. Several smaller mines have come on-stream recently, and these are also important sources, primarily in the secondary market. Let’s look at a few of them. 

Upcoming Diamond Projects – Kao, Braúna, Ghaghoo & Lulo

In our current series of articles, we have been looking at some of the main new sources of diamond supply in the world. These new mines will replace some of the expected reduction in supply, as older mines reach the end of their lifespan in coming years. The mines that I have focused on so far have been somewhat larger projects, with at least one million carats of expected output. Several smaller mines have come on-stream recently, and these are also important sources, primarily in the secondary market. Let’s look at a few of them.

Kao Mine – Namakwa Diamonds

The Kao diamond mine is named after the community in which it is located, within the Butha-Buthe district of the Kingdom of Lesotho. Like all other projects in the country, the mine is located within the Maloti Mountain ranges in the northern part of the country.

The mine is the largest diamond bearing kimberlite pipe in the kingdom, at 19.8 hectares, and is the fourth largest in southern Africa. The project is owned partly by the government of Lesotho, and partly by privately-held Namakwa Diamonds of South Africa, through its subsidiary, Storm Mountain Diamonds. Namakwa also has an interest in a smaller alluvial project in South Africa, and some additional exploration properties.

The company has been selling diamonds from the mine since early 2010, and production volumes at the mine have increased since production started. The massive mine is estimated to contain 189 million tonnes of kimberlite, containing an estimated 12.8 million carats of diamonds. It has produced several important, large stones, including the 36 carat Pink Storm, which was tendered in 2014.  The company sells its diamond production in open tenders, organized by Bonas-Couzyn in Antwerp.

Braúna Mine - Lipari Mineração

Braúna is owned and operated by the privately-held  Lipari Mineração Ltda of Brazil. The mine is located within the Municipality of Nordestina, in the Brazilian state of Bahia to the Northwest. Interestingly, despite Brazil’s long history of diamond mining, Braúna is the first mine, both in Brazil and South America, to be developed from a primary kimberlite source. All other diamond mining to date had been alluvial.

The mine features a 2,000 tonne per day processing plant that operates year-round. Diamond production is currently limited to the Braúna 3 kimberlite, but there are an additional 21 kimberlites on the property in various stages of exploration. The new project had its first sales in late 2016, and production continues to grow in size and scope. Like Kao, the Braúna rough production is sold by open tender in Antwerp.

Ghaghoo Mine – Gem Diamonds

The Ghaghoo Mine in Botswana was officially opened in 2014, and is the country’s only completely underground diamond mine. The mine  was initially designed to be an open pit operation. However, it is located beneath huge volumes of overburden, principally sand, at depths of up to 80 meters. To eliminate the need to move so much earth to expose the kimberlite below, it was decided in 2009 to develop the project as a completely underground mine.

The mine was first discovered in 1981 and was named Gope, which means ‘nowhere’ in the native Setswana. The name Ghaghoo comes from an abundant tree in the area, which locals have historically used to refer to the remote area itself.

Gem Diamonds, the full owner of the project, has elected to take a conservative approach to developing the mine, starting with a staged approach to confirm the economics of the project, before a full-scale ramp up is commenced.

The mine is currently expected to process around 300,000 tonnes of kimberlite annually, producing an estimated 80,000-85,000 carats. Diamonds from Ghaghoo are sold through Gem’s internal marketing arm. 

Lulo Mine – Lucapa Diamonds

Small Australia-based miner Lucapa Diamonds has been a staple of diamond media outlets for the last two years, since mining began at its  Lulo project in Angola. The Lulo concession is a massive 3,000 square kilometer property within 150 kilometer of the world’s fourth-largest producing diamond mine, Catoca.

The mine is owned as a partnership between Lucapa, state-owned diamond company Endiama, and private firm Rosas & Petalas. The property features a mix of alluvial and hard-rock kimberlite mining, and has additional exploration activities.

Lulo is best known for its large diamonds, which according to the company account for more than 90 percent of the mine’s revenue. Lulo has produced many important large stones, including fancy pinks and yellows. Among the steady stream of high-profile large diamonds was a 404-carat type IIa diamond, believed to be the largest diamond ever mined in Angola. The diamond sold for $16 million in February 2016.

Lucapa reported that 2016 production totaled nearly 20,000 carats, and revenue from selling diamonds totaled $51 million. The average achieved price of $2,983 per carat makes it the highest average price for any production in the world. 

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.