Despite being reliant on the enigmatic rarity of its product, the world’s leading discoverer of diamonds continues to hunt for the “next Jwaneng”. Having found the precious stones in deserts, seas and under ice, De Beers has added Angola to its search for the next big find. Staff Writer, MBONGENI MGUNI reports
If a Jwaneng Mine-sized diamond deposit is hidden undiscovered anywhere in the world, De Beers is confident it will be the company to find it. And with good reason.
Since its establishment 134 years ago, the global giant that almost single-handedly built the story and related dynamics that sell the precious stones, has found about 40% of the 8,000 kimberlites or diamond-bearing soils ever discovered on earth.
Tier 1 discoveries such as Jwaneng and Orapa are extremely rare but when they are found, they are transformational, not only to countries’ economies but the broader industry as a whole. Petra Diamonds, a smaller diamond player with mines in South Africa and Tanzania, says the success rate in diamond exploration is estimated at less than 1% and there have been no major new finds for over 20 years.
Meanwhile, a growing middle class in key markets such as India and China, as well as forecast strong demand in the world’s biggest consumer of diamonds, the United States, means the industry enjoys a healthy forecast for its precious stones going into the future.
“The long-term outlook for the industry is very much positive,” David Johnson, De Beers’ head of Strategic Communications, tells Mmegi.
“Besides the growth of the middle class in key markets, the way people buy diamond jewellery also continues to evolve.
“For instance, women are buying diamonds for themselves and as more of them control larger shares of income, that drives that appetite as well.”
Global diamond production peaked at 117 million carats in 2015 and, according to Petra, it is unlikely the world will ever see that level of production again. The lack of new major discoveries and the fact that the existing Tier 1 mines, which number less than 10 around the world, are ageing, has restrained producers.
Market dynamics have also kept production below white hot while the onset of COVID-19 considerably curtailed production in 2020 and will continue to echo over the years as the global economy staggers back to its feet.
While a theoretical supply gap sounds like it would bode well for an industry who’s selling point is the exclusive rarity of diamonds, stable sources of supply at different grades are required to keep the industry viable into the future.
Years ago, De Beers had an exploration presence in more than 20 countries ranging from Venezuela, to Guinea and Zimbabwe and spent US$100 million annually. In a strategic turn, the diamond giant then narrowed its search to the countries where it already had mining operations, being Botswana, South Africa, Namibia and Canada.
Even with the narrower focus, De Beers always kept an eye on Angola, a largely unexplored area where the group’s previous findings in the 1970s indicated rich deposits could lie. However, a bloody civil war stifled exploration and production, with attacks on operating mines. De Beers had pioneered a partnership involving the training of Angolan diamond sorters and marketing of diamonds in London, similar to the arrangements currently in place for Botswana.
By 1986, relations had broken down, amidst rebel attacks on the mines and De Beers packed its bags.
The Dos Santos family control which lasted until 2017, kept Angola out of reach, with its minerals sector wound up within the political elite. The former strongman’s departure, however, led the ground to changes in mineral policy and control, allowing De Beers to resume exploration in the country.
Last week, De Beers Group announced that it had signed two 35-year contracts with the Angolan government, covering exploration to mineral production.
“It’s been a process of discussion for a period and the investment environment there has evolved,” says Johnson.
“Angola has been one of the most interesting areas for diamonds which has not been explored well.
“The government there has reformed the industry for increased transparency and instituted a new governance model.
“De Beers has a track record of establishing these partnerships in Southern Africa and we feel we can work together to meet the interests of both parties, thanks to the evolution of the business environment.”
Besides Angola, De Beers is expanding its exploration ground in Namibia. Canadian exploration is the closest to production, while advanced work is also ongoing in South Africa, with a number of applications being made. Review assessments are due for the samples collected from the Botswana project areas.
So, is the world’s best discoverer of diamonds any closer to finding a new Jwaneng?
“I certainly hope so and it would be very much appreciated,” Johnson says.
“However, the challenge is that it’s very hard to know.
“Those Tier 1 deposits, very few of them have ever been discovered, but that’s not to say they cannot be.
“It’s likely in Angola or Botswana that something like that could be discovered, but it’s not possible to say that will happen.”
He adds: “It’s really an extremely challenging and expensive process but it is highly transformative when it happens.”
As demand perks up globally, with healthy forecasts for the future, producers such as De Beers are keen on ensuring that supply keeps up. The approach, Johnson says, is to expand existing mines and enhance recoveries from them such as through the Jwaneng and Orapa resource extension projects. De Beers’ Venetia Mine, the largest diamond mine in South Africa and the last of its kind to be developed in that country in the last 25 years, is also transforming to an underground project in order to deliver more stones into the future.
‘It’s not all about exploration and new finds, but also about doing the best with the deposits we have.
“In addition, in terms of the supply gap, there tends to be an evolution of price and different types of diamonds at a different level of supply and pricing.
“Technology also continues to develop over time, so that the rough to polished yield improves and you find that you do not need as much rough for the final product.
“We are happy with the outlook for demand, our capacity to increase production from existing deposits and the exploration portfolio we have.”
Other producers have adopted similar approaches in the face of the low chances of a Jwaneng being unearthed in the future. As exploration continues, however, Southern Africa appears to hold the highest chances of producing the next big one.
Since its establishment 134 years ago, the global giant that almost single-handedly built the story and related dynamics that sell the precious stones, has found about 40% of the 8,000 kimberlites or diamond-bearing soils ever discovered on earth.
Tier 1 discoveries such as Jwaneng and Orapa are extremely rare but when they are found, they are transformational, not only to countries’ economies but the broader industry as a whole. Petra Diamonds, a smaller diamond player with mines in South Africa and Tanzania, says the success rate in diamond exploration is estimated at less than 1% and there have been no major new finds for over 20 years.
Meanwhile, a growing middle class in key markets such as India and China, as well as forecast strong demand in the world’s biggest consumer of diamonds, the United States, means the industry enjoys a healthy forecast for its precious stones going into the future.
“The long-term outlook for the industry is very much positive,” David Johnson, De Beers’ head of Strategic Communications, tells Mmegi.
“Besides the growth of the middle class in key markets, the way people buy diamond jewellery also continues to evolve.
“For instance, women are buying diamonds for themselves and as more of them control larger shares of income, that drives that appetite as well.”
Global diamond production peaked at 117 million carats in 2015 and, according to Petra, it is unlikely the world will ever see that level of production again. The lack of new major discoveries and the fact that the existing Tier 1 mines, which number less than 10 around the world, are ageing, has restrained producers.
Market dynamics have also kept production below white hot while the onset of COVID-19 considerably curtailed production in 2020 and will continue to echo over the years as the global economy staggers back to its feet.
While a theoretical supply gap sounds like it would bode well for an industry who’s selling point is the exclusive rarity of diamonds, stable sources of supply at different grades are required to keep the industry viable into the future.
Years ago, De Beers had an exploration presence in more than 20 countries ranging from Venezuela, to Guinea and Zimbabwe and spent US$100 million annually. In a strategic turn, the diamond giant then narrowed its search to the countries where it already had mining operations, being Botswana, South Africa, Namibia and Canada.
Even with the narrower focus, De Beers always kept an eye on Angola, a largely unexplored area where the group’s previous findings in the 1970s indicated rich deposits could lie. However, a bloody civil war stifled exploration and production, with attacks on operating mines. De Beers had pioneered a partnership involving the training of Angolan diamond sorters and marketing of diamonds in London, similar to the arrangements currently in place for Botswana.
By 1986, relations had broken down, amidst rebel attacks on the mines and De Beers packed its bags.
The Dos Santos family control which lasted until 2017, kept Angola out of reach, with its minerals sector wound up within the political elite. The former strongman’s departure, however, led the ground to changes in mineral policy and control, allowing De Beers to resume exploration in the country.
Last week, De Beers Group announced that it had signed two 35-year contracts with the Angolan government, covering exploration to mineral production.
“It’s been a process of discussion for a period and the investment environment there has evolved,” says Johnson.
“Angola has been one of the most interesting areas for diamonds which has not been explored well.
“The government there has reformed the industry for increased transparency and instituted a new governance model.
“De Beers has a track record of establishing these partnerships in Southern Africa and we feel we can work together to meet the interests of both parties, thanks to the evolution of the business environment.”
Besides Angola, De Beers is expanding its exploration ground in Namibia. Canadian exploration is the closest to production, while advanced work is also ongoing in South Africa, with a number of applications being made. Review assessments are due for the samples collected from the Botswana project areas.
So, is the world’s best discoverer of diamonds any closer to finding a new Jwaneng?
“I certainly hope so and it would be very much appreciated,” Johnson says.
“However, the challenge is that it’s very hard to know.
“Those Tier 1 deposits, very few of them have ever been discovered, but that’s not to say they cannot be.
“It’s likely in Angola or Botswana that something like that could be discovered, but it’s not possible to say that will happen.”
He adds: “It’s really an extremely challenging and expensive process but it is highly transformative when it happens.”
As demand perks up globally, with healthy forecasts for the future, producers such as De Beers are keen on ensuring that supply keeps up. The approach, Johnson says, is to expand existing mines and enhance recoveries from them such as through the Jwaneng and Orapa resource extension projects. De Beers’ Venetia Mine, the largest diamond mine in South Africa and the last of its kind to be developed in that country in the last 25 years, is also transforming to an underground project in order to deliver more stones into the future.
‘It’s not all about exploration and new finds, but also about doing the best with the deposits we have.
“In addition, in terms of the supply gap, there tends to be an evolution of price and different types of diamonds at a different level of supply and pricing.
“Technology also continues to develop over time, so that the rough to polished yield improves and you find that you do not need as much rough for the final product.
“We are happy with the outlook for demand, our capacity to increase production from existing deposits and the exploration portfolio we have.”
Other producers have adopted similar approaches in the face of the low chances of a Jwaneng being unearthed in the future. As exploration continues, however, Southern Africa appears to hold the highest chances of producing the next big one.
