You know that we love to share insight with you about the worldwide diamond market and mining operations. It’s the kind of information that people rarely get to learn about from the perspective of an insider. These two articles from The New York Times and the trade journal IDEX are very interesting, especially when considered from a combined perspective. Keep in mind that everything is not always what it seems, and that perspective is always a matter of, well, perspective.
Our interpretation of these two articles simply reflects our perspective on the matter, but we encourage you to form your own opinion (and comment on that below). According to the New York times article dated February 6th, De Beers announced that they intend to spend $35M/year on diamond exploration. The article also states that the diamond industry as a whole spent a total of $7B/year on diamond exploration between 2000 and 2013. Throughout that time, only one significant size diamond deposit was discovered.
The significant diamond deposit being referred to was the Bunder deposit in India, which was founded in 2004 by the Rio Tinto Mining Group. The photograph above shows diamond rough being sorted is courtesy of the Rio Tinto Mining Group. Isn’t it interesting how diamonds look in the natural, rough state?
But here’s where things get really interesting. Two days after De Beers announced their intent to maintain their exploration budget of $35M/year, Rio Tinto announces that they are giving the Bunder project to the local Indian government.
If the Rio Tinto Mining Group elected to just give away the most significant size diamond deposit discovered in the past few years, after spending so much money on exploration, we can only surmise that diamond mining is an extremely expensive proposition. That’s our theory, what is yours?
Photo Courtesy: Rio Tinto Mining Group