DIAMONDS
A NEW ERA BECKONS FOR AUSTRALIAN DIAMOND MINING The next wave of ASX-listed diamond miners is emerging with ambitions to put Australia back on the map as a producer of these elusive gems.
W
hen Rio Tinto closed the Argyle diamond mine in 2020 it was not only the end of an era for the major miner but also for Australia as a producer of the resource. Rio Tinto operated Argyle in the East Kimberley for 37 years, producing more than 865 million carats of diamonds, most notably the coveted pink diamond. Argyle kept Australia at the forefront of global diamond mining until the end, including as the world’s second largest producer last year, according to the Western Australian Department of Mines, Industry Regulation and Safety (DMIRS). The DMIRS revealed in its latest statistics digest that Western Australia’s diamond sales increased to 17.4 million carats ($225 million) in 2019-20, which was the state’s highest level in more than a decade after an increase in Argyle’s final output.
Lucapa’s Mothae plant in Lesotho.
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However, the DMIRS also expects domestic diamond production to reach near zero following Argyle’s closure. And while Australia diamond production may remain almost non-existent in the foreseeable future, there is hope on the horizon that the country will again rise up the ranks of producers. The ASX still hosts a handful of diamond companies, with Lucapa Diamond Company one that has successfully pursued international operations in recent years. Lucapa has, however, increased its diamond interests closer to home with the acquisition of the Merlin project in the Northern Territory. According to the Territory Economic Reconstruction Commission’s final report from December 2020, the Northern Territory hosts the second highest amount of known diamond resources in Australia.
This could see diamond miners take advantage of the government’s support for growing its mining industry. In May, Lucapa agreed to acquire the Merlin diamond project from Merlin Operations for $8.5 million. The Merlin mine has a storied history in the Territory, being home to the largest diamond ever discovered in Australia in 2002. It still contains a 4.4-million-carat joint ore reserves committee (JORC) compliant resource, which represents an acquisition cost equal to $2 per resource carat. Lucapa aims to bring the mine back into production in 2023. “When Merlin is brought into production it will be Lucapa’s third operating mine and when fully operational, it will significantly increase the quantity of diamonds being produced by Lucapa as a group and elevate Lucapa to a mid-tier producer,” Lucapa chief
