Argyle diamond mine

The Argyle diamond mine ( 16°42′44″S 128°23′51″E) is a diamond mine located in the Kimberley region of Western Australia. The Argyle mine is the largest diamond producer in the world by volume, although due to the low proportion of gem-quality diamonds, is not the leader by value. It is the only known significant source of pink diamonds, producing 90 to 95% of the world's supply.

The Argyle diamond mine is also notable for being the first successful commercial diamond mine exploiting a volcanic pipe of lamproite, rather than the more usual kimberlite pipe. Much earlier commercial attempts to mine diamonds from a lamproite pipe in Arkansas in the southern United States were unsuccessful; the lamproite pipe there is now contained within the Crater of Diamonds State Park. The Argyle mine is owned by the Rio Tinto Group, a diversified mining company which also owns the Diavik Diamond Mine in Canada and the Murowa diamond mine in Zimbabwe.

Description

The mine covers about 450,000 square metres (110 acres), stretching in a mostly linear shape about 1600 metres (5,200 ft) long and 150 to 600 metres (500 to 2,000 ft) wide. The mine is of open pit construction, and reaches about 600 metres (1,900 ft) deep at its deepest point.

Location

The Argyle diamond mine is located in the Kimberley region in the far northeast of the Australian state of Western Australia. It is located to the southwest of Lake Argyle in the Matsu Ranges, about 550 kilometres (340 miles) southwest of Darwin. Because the mine is located about 120 kilometres (75 miles) from the nearest settlement ( Kununurra), a complete residential camp has been constructed on site. Most of the 520 workers commute from Perth (over 2,000 kilometres, or 1,200 miles, away) for alternating two week shifts at the mine. The mine has encouraged local employment and has a large number of indigenous local people working within the mine.

Geology

The mine is the first successful commercial diamond mine (except alluvial mining operations) not located on a kimberlite pipe. The pipe is named "AK-1", although it is commonly simply called the "Argyle pipe".

The volcanic pipe is a diatreme, composed of olivine lamproite, present as tuff and lava. Peripheral volcanic facies suggest the lamproite eruption formed a maar. At the margins of the volcanic pipe the lamproite is mixed with a volcanic breccia containing shattered wall rock fragments mixed and milled by the eruption. Minerals in the marginal facies include zeolite minerals, micas, kaolinite and clays, typical of post-eruption hydrothermal circulation.

Diamonds are found within the intact core of the volcanic pipe, as well as within some of the marginal breccia facies and maar facies. However, some diamonds are considered to have been resorbed during the post-eruption cooling of the pipe and converted to graphite.

The diatreme pipe formed by explosive eruption of the lamproite magma through a zone of weakness in the continental crust.

The diamonds found at the Argyle pipe have been dated to about 1.58 billion years of age, while the volcano which created the pipe is aged between 1.1 and 1.2 billion years old. This represents a relatively short period during which diamond formation could have taken place (around 400 million years), which may explain the small average size and unusual physical characteristics of Argyle diamonds. Diamonds found in the Argyle pipe are predominantly eclogitic, meaning that the carbon is of organic origin (see Natural history of diamonds).

In addition to the pipe itself, there are a number of semi-permanent streams that have eroded away portions of the pipe and created significant alluvial deposits of diamonds. These deposits are also actively mined.

Production

The Argyle diamond mine leads the world in volume production of diamond, averaging annual production of 35 million carats (7,000 kg), or about one third of global production of natural diamonds. Production peaked in 1994, when 42 million carats (8,400 kg) were produced. Of this quantity only 5% is considered gem-quality, with the rest being either near-gem quality or industrial grade; this is somewhat below world averages of about 20% of mined diamonds qualifying as gem-grade. Since the mine's opening in 1985, it has produced over 600 million carats (120,000 kg) of diamonds.

Most of Argyle's gem quality production is in brown diamonds. These diamonds are usually difficult to sell, although Rio Tinto has seen some success in a decade-long marketing campaign to promote brown diamonds as champagne and cognac toned. In contrast, the company has no problems selling pink and red diamonds, which are very rare and in high demand, therefore commanding premium prices. The pink diamonds are processed and sold as polished diamonds by a specialised team based in Perth to customers world wide. The highlight of the coloured diamond industry calendar is the annual Pink Diamond Tender. Access to its collector's edition catalogue and website access in itself is highly sought after.

The mine has ore processing and diamond sorting facilities on site. Once diamonds are removed from the ore and acid washed, they are sorted and shipped to Perth for further sorting and sale. A significant quantity of diamonds are cut in India, where low costs of labor allow small diamonds to be cut for a profit; this is especially relevant to the Argyle mine, which on average produces smaller rough diamonds than other mines do.

Diamond characteristics

The diamonds produced at the Argyle diamond mine are of an average low quality. Only 5% of mined diamonds are of gem quality, compared to a worldwide average of 20%; of the remaining 95%, they are about evenly split between classifications of "near gem quality" and industrial grade. 80% of Argyle diamonds are brown, followed by 16% yellow, 2% white, 2% grey, and less than 1% pink and green. Despite the low production volume of pink and red diamonds, the Argyle mine is the only reliable source in the world, producing 90 to 95% of all pink and red diamonds. Most Argyle diamonds are classified as type 1a (see material properties of diamond), and have low levels of nitrogen impurities, their colour resulting instead from structural defects of the crystal lattice. Argyle diamonds tend to fluoresce blue or dull green under ultraviolet light, and blue-white under X-ray radiation. The most common inclusion is unconverted graphite, followed by crystalline inclusions of orange garnet, pyroxene, and olivine.

Reserves

Initial proven reserves of the Argyle mine were 61 million tonnes of ore, with an average ore grade of 6.8 carats (1.36 g) per or tonne, about 400 million carats (80,000 kg). Further estimated reserves of 14 million tonnes of ore, at a grade of 6.1 carats (1.22 g) per tonne (85 million carats, 17,000 kg), also existed. As of 2001, reserves and resources in the open-pit mined area contain 220 million tonnes of 2.5 to 3.0 carat (500 to 600 mg) per tonne graded ore, sufficient to sustain current production rates until 2007. The ore grades at the Argyle mine are unusually high, with most commercial diamond mines averaging grades of 0.3 to 1.0 carats (60 to 200 mg) per metric ton. Alluvial deposits of diamonds are believed to have been exhausted.

In 1995, drilling samples taken from about 300 metres below the floor of the pit indicated the possible presence of about 100 million tons of ore, with an estimated grade of 3.7 carats (740 mg) per ton. In 1998, it was decided to instead move mining operations toward the west ridge of the mine, where 64 million tons of ore graded at 2.6 carats (520 mg) per ton are located.

An exploration decline was constructed at a cost of A$70 million to evaluate the economics of mining diamonds from the diamoniferous pipes below the floor of the open pit; these reserves would be mined underground (via block caving), rather than the open pit method currently used. In late-2005 Rio Tinto Ltd concluded that the operation was economically feasible. Pre-production construction of the underground mine commenced in early to mid 2006

Economics

The Argyle diamond mine is economically feasible because its large reserves and high grade ore offsets a low average diamond weight value. The estimated value of Argyle diamond production is only US$7 per carat (US$35/g); this compares to values of 70 USD per carat ($350/g) for diamonds produced at the Diavik mine and US$170 per carat (US$850/g) at the Ekati mine, both in Canada. However, Argyle has two to four times the concentration of diamonds (ore grade) of these mines. This makes extraction economically feasible, as mine costs are mostly related to the amount of ore processed, not the amount of diamond extracted.

Underground expansion

In 2005 Rio Tinto was given the go ahead to a future expansion project, moving it from an open pit to an underground mine. The project is predominantly an underground construction requiring high quality development and engineering excellence. The Block Cave is expected to operate until 2018 using the latest in mining technology, including Sandvik's auto mining technology.

The project is due to be completed by 2010.

History

Small quantities of alluvially deposited diamonds have been known in Australia since the late 19th century, first found by prospectors searching for gold. However, no source volcanic pipe deposit was apparent. A systematic search of Western Australia for the source of these diamonds began in 1969, and on October 2, 1979, the Argyle pipe was discovered. Over the following three years, the deposit was assessed for economic viability, and in 1983 the decision was made to commence mining operations. Alluvial mining operations commenced immediately, while the open pit mine was constructed over a period of 18 months at a cost of A$450 million. The mine was commissioned in December 1985.