Firestone recovers 46 carat white diamond from Lesotho mine

Firestone Diamond said it has recovered a 46 carat white, makeable diamond from its Liqhobong Mine, in Lesotho.


Russia’s Ministry of Natural Resources and Environment warns of a possible shortage of diamonds in the country

The Ministry of Natural Resources and Environment of the Russian Federation notifies of a future shortage of diamonds in the country and plans to make up for it by mining diamonds in Karelia, Dmitry Kobylkin, the head of the ministry said.

14 december 2018

De Beers to partially lift its source-disclosure ban – report

De Beers is set to relax its source-disclosure restrictions for diamond buyers known as sightholders as calls for transparency grow to a crescendo, according to Rapaport News.

14 december 2018

AGD Diamonds commissioned yet another facility to improve ecology at the Grib mine

In mid-December, AGD Diamonds’ Mining and Processing Unit at the Grib diamond mine launched a car wash to clean rock haulers and auxiliary mining equipment, the company’s press service said.

14 december 2018

Trans Hex returns to profitability

Trans Hex, which has operations in Angola and South Africa, said it recorded a net profit of R52-million ($3.7 million) for the six months ended September 30, compared to a loss of R199-million ($14 million), a year earlier.

14 december 2018

Johan Dippenaar: Prices for both rough and polished are performing well currently and we believe that the longer-term fundamentals of the market are robust

27 june 2011

In recent years, Petra Diamonds, an international diamond mining company, has been among the top players in the global rough diamond market. Analysts call it the Star of Africa and it is a strong rival of De Beers due to the acquisition of global big-name mines. The company’s responsible attitude to developing its projects in the field of natural resources in South Africa gives it a chance to prosper economically and stay confident. Johan Dippenaar,  Chief Executive Officer of Petra Diamonds, gave this interview to Rough & Polished.

Petra Diamonds today is on a top position in the rough diamond market. How old is your company?

Petra Diamonds first listed on London’s AIM market in 1997 but the company as you know it today was really born in 2005 when exploration-focused Petra merged with production-focused Crown Diamonds. The combined group then commenced an acquisition trail in 2007 which has seen Petra acquire four major mines from De Beers, with a fifth acquisition, the Finsch mine, soon to be incorporated into the group.

How many people work in Petra?

The Petra group currently comprises over 3,600 employees.

Could you briefly tell us about the acquisition of the Finsch diamond mine?

Petra is currently in the process of acquiring Finsch, which is South Africa’s second largest diamond mine by production. The acquisition process is progressing well and all that remains to be completed now is the Ministerial transfer of the mining right to Petra, which is expected soon. Finsch will immediately more than double our annual production and will increase our group resource base by 48 million carats to a total of 309 million carats, with an in-situ value of $42.5 billion.

How many mines belong today to your company?

Once the acquisition of the Finsch mine completes, Petra will have eight producing diamond mines – seven in South Africa (Finsch, Cullinan, Koffiefontein, Kimberley Underground, Helam, Sedibeng and Star) and one in Tanzania (Williamson).

Which mine is the most productive?

Initially the Finsch mine will be the largest contributor to the Group but once the expansion plan at Cullinan has progressed further, it will eventually overtake the Finsch mine by volume. However, the two mines will rank pretty equal in terms of contribution by value as the diamonds at Finsch are on average of a higher value than at Cullinan. 

For many years your company has been mostly focused on South Africa. What aspects in relations with African governments are the most difficult?

The company initially was involved in exploration in Angola and Botswana, but since 2007 South Africa has become increasingly our main focus. We have been operating in the country for a long time now and we are therefore very comfortable with the local environment and enjoy positive relations with the Government and other relevant bodies, such as the various trade union groups. The same can be said for our newer experience in Tanzania where we have been welcomed to the company as the new operators of the Williamson mine.

Have you enjoyed any support from the Department of Mineral Resources of South Africa?

The Department of Mineral Resources (‘DMR’) in South Africa has been integral in terms of facilitating our deals to acquire mining operations from De Beers. There have been four such transactions now in South Africa and the DMR has recognized that the Petra group has the right skillset in order to provide long-term, sustainable futures for these important diamond operations.

Does this include any obligations to rehabilitate the environment? What does your company do in this regard?

These obligations refer to the actions that the company must take in order to best rehabilitate the land when the mine is eventually closed in order to restore it to a stable, productive condition. Rehabilitation and revegetation of the mine site and waste dumps and control of run-off, discharges and seepage are therefore crucial elements in a mine closure plan. Calculating and agreeing with the Government an appropriate sum to adequately cover such a plan is a key component towards complying with your mining license.

Is there any difference between South African diamonds and diamonds mined in other African countries?

This is a difficult question to answer as you find such a wide variety of diamonds in every host country. However it is true to say that South African diamonds do have an international kudos and heritage attached to them, due to the historical output from some of the world’s great mines, such as Cullinan, Kimberley and Venetia. For this reason, South African diamonds are highly sought after in China, for example, further to successful marketing campaigns which have promoted South Africa’s proud diamond legacy.

In your view, what are the prospects for the diamond deposits in Zimbabwe? Have you tried to cooperate with this country?

At this point in time there is not enough factual data to accurately determine the scale of Zimbabwe’s future production, though what is clear is that the diamonds are on average of a lower quality. There are reports that suggest the potential for large annual output, but there is also considerable debate as to whether the geology of the alluvial deposits there could sustain high production levels over an extended period of time. Some commentators are of the opinion that the potential Zimbabwean production will help to sustain the cutting and polishing capacity that was created, especially in India, to beneficiate the large volumes of lower value diamonds from the Argyle mine. Petra is watching with interest the developments in Zimbabwe and we are monitoring the progression of the political and commercial climate.

What diamond deposits are the most attractive in Africa?

Our focus is on production from hardrock kimberlite pipe mines as these operations provide a high degree of certainty with regards to their production parameters, including grade, average value per carat and cost per tonne. This is because each kimberlite pipe has a ‘fingerprint’ in terms of the unique characteristics of its diamond population and therefore the mine can be planned for many years to come based on this information. Whilst we have a very high quality asset portfolio, in the Finsch, Cullinan, Williamson, Koffiefontein and Kimberley mines, Africa is also host to Jwaneng, the world’s greatest diamond mine.

Could you give a few figures about Petra’s performance last year and say what is expected in 2011 and 2012?

Petra mined over 1.1 million carats in our 2010 financial year and will achieve a similar level for this year. However, we will record a big step change in output in the 2012 financial year (which commences in July 2011) as we will have completed the acquisition of the Finsch mine by then. This mine will produce around 1.5 million carats in its first full year under our management, and will subsequently more than double our production immediately. However, longer-term, our core strategy is to further increase output and we are targeting annual production of more than 5 million carats by 2019.

Quite recently, you said that the rough diamond market returned to its 2008 pre-crisis level in terms of prices. Could you comment the situation in more detail?

We foresee a positive outlook for the diamond market. Rough diamond prices recovered much quicker than anticipated after the falls in the midst of the global economic downturn, mainly due to the responsible behaviour of the majors who restricted supply to the market. Rough prices continued to strengthen towards the end of 2010 and well into 2011 and it is obvious that demand for rough is now underpinned by retail demand, as well as further to the restocking of cutting centre and manufacturing inventories. The liquidity within the diamond pipeline improved dramatically throughout 2010 and bank debt in the industry appears to have now reduced to manageable levels. Prices for both rough and polished are performing well currently and we believe that the longer-term fundamentals of the market are robust, based upon a steady improvement in the US market coupled with exciting demand growth from emerging markets such as China and India.

In your opinion, what kind of efforts should be taken by diamond players to keep the diamond market in good trim?

We need to see continued investment in existing mines in order to maintain supply, which is currently tight to the market and predicted to worsen as demand for diamonds grows worldwide. This is why Petra has committed to significant capital programmes in order to increase output across the group and why we have also seen the majors recently approve large Capex plans in order to prolong the lives of their key diamond operations. With the right care and attention, our diamond mines will have long, sustainable futures ahead of them and our focus is on delivering a consistent and growing supply of diamonds to the market.

Veronica Novoselova, Rough&Polished