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DRC learns quality matters most than volume in diamond mining

24 july 2013

The Democratic Republic of the Congo (DRC) produced 21.524 million carats last year, data published by the Kimberley Process (KP) shows.

The central African country’s gems were, however, valued at $183.1 million despite the high output.

This was in sharp contrast with Angola, which produced 8.330 million carats during the same period but had its gems valued at $1.11 billion, making it the fourth leading diamond producing country by value globally.

South Africa, which produced 7.077 million carats in 2012, trounced DRC as its diamonds were valued at $1.03 billion.

As if that was not enough, Zimbabwe also outpaced DRC in value terms.

The southern African country produced 12.060 million carats valued at $644 million, according to KP.

One cannot even mention, Botswana, which earned $2.98 billion having produced 20.554 million carats in the same year or Russia that accrued $2.87 billion after recording an output of 34.927 million carats.

The poor value of DRC diamonds had been a thorn in the flesh for some time.

In 2011, DRC produced 19.2 million carats making it the second largest producer in Africa by volume after Botswana, which produced 22.9 million carats.

It was also the world’s third largest diamond producer by volume.

However, all was not rosy in value terms as the central African country exported 18.8 million carats for a value of about $335 million.

The quality of DRC’s diamonds was very poor as mining had been dominated by small scale miners.

Artisinal mining of placer diamond deposits in the DRC takes place along the Bushimaïe and Lubilash tributaries to the Sankuru River (Bakwanga Mine) near the town of Mbuji-Maye (formerly Bakwanga) in the Kasaï-Oriental province and along the Tshikapa River (Forminière Diamond Mine) in the Kasaï-Occidental province.

It was also believed that some 700,000 artisanal miners operate in the DRC, encouraged to some extent by a law passed in 1981 that forced Miniere de Bakwange (MIBA), a state-owned diamond mining company, to open up the majority of its fields to artisanal diggers.

Global Witness said the DRC’s industrial mining sector was in tatters that it cannot be in a position to produce such millions of carats every year without the help of small scale miners.

However, there had been efforts of late to boost industrial mining of diamonds in the country.

Bloomberg reported last March that Anhui Foreign Economic Construction Group of China had established a joint venture (JV) with the DRC government to mine diamonds in Eastern Kasai province.

The joint venture, known as Societe Anhui- Congo d’Investissement Minier Sprl, or SACIM, had two diamond-exploration permits in Tshibwe, about 50 kilometers from Mbuji-Mayi, the country’s main diamond trading center.

It would replace the DRC state-controlled Societe Congolaise d’Investissement Minier Sprl.

The 50-50 venture would likely produce 6 million carats a year by 2016 and Anhui would pay $4.2 million for its half and a signing bonus of $61 million.

It would also invest about $100 million in infrastructure.

DRC on the other hand would receive $9.15 million of the signing bonus up front, and another $10.1 million at production.

Bloomberg noted that the JV partners intended to take the company public.

Apart from this deal with the Chinese, new industrial projects were expected in DRC.

Delrand Resources announced last month that it had identified several “high-interest” targets during its diamond exploration activities in southern Democratic Republic of the Congo (DRC).

It said that further follow-up work would be done subsequent to a review of a large diamond exploration database, as part of an agreement with Rio Tinto, covering areas in excess of 100,000 km2.

"The company is now processing and further exploring arguably one of the most comprehensive DRC diamond exploration data bases that have ever been assembled," said Delrand president Mike de Wit.

The exploration work had so far identified permits with samples that contain lherzolitic garnets formed under minimum pressures of 53.4 kilobars.

These garnets, which are associated with abundant kimberlitic ilmenite, are likely to be derived from kimberlites that are diamond-bearing, it said.

There is no doubt that DRC had the potential to be one of the leading gem producers by value in the world should these projects take off the ground and start mining high-quality diamonds.

Mathew Nyaungwa, Editor in Chief of the African Bureau, Rough&Polished