It turns out diamonds might not be forever. The global supply of rough (unpolished) diamonds is forecast to drop in value terms by 1 to 2 percent annually through 2030, according to Bain & Co., as demand for the prized gems grows by 2 to 5 percent each year. With easy pickings gone and aging mines closing, mining companies must spend more on projects to locate and tap deposits—and be willing to walk away when risks outweigh rewards. For example, after spending US$120 million over six years, global mining giant Rio Tinto last year abandoned a US$330 million project in India in light of environmental concerns, including the potential impact on tiger habitats.
After spending US$120 million over six years, global mining giant Rio Tinto last year abandoned a US$330 million project in India in light of environmental concerns.
Mining organizations are looking for ways to speed up ROI as they target new diamond fields. For its portfolio of exploration projects in Canada, South Africa and Botswana, De Beers teams are leveraging new technologies—including superconducting quantum interference devices (SQUID) that can indicate the presence of diamond deposits 1,000 feet (305 meters) below the earth's surface. The organization plans to also implement artificial intelligence software and complex algorithms to quickly review masses of data and mineral sampling results.
“You could have a 30 percent chance of success and it could still be worth doing.”
—Danie Pretorius, Master Drilling, Fochville, South Africa
The SQUID technology can deliver big benefits, Beth Taylor, senior technical assistant to the head of De Beers Group Exploration, told Mining Magazine in April. “The technology will … make the search for diamonds much less expensive as we can use the survey results to focus on the most promising areas, reducing the need for drilling.”
At De Beers and other mining organizations, projects to develop new technologies often involve external collaborations. Petra Diamonds has been working with Master Drilling since 2014 on a pilot project in Cullinan, South Africa to develop and test horizontal raise-boring technology. The organizations say the technique allows drills to advance through ore-bearing rock at about 4 meters (13 feet) a day, twice the pace of conventional drill and blasting methods. The technology requires fewer miners than traditional approaches, and drilling can proceed around the clock.
Executing the pilot project at Petra's Cullinan mine required some improvisation and agility. Months into the test, the drill bit became stuck in rocks, forcing the team to drill a second tunnel to retrieve the drilling rods. The project finally wrapped up in February, and Petra is now in negotiations with Master Drilling to use the technology at the Cullinan mine beyond the pilot area.
All innovation projects by definition involve balancing risk and reward, says Master Drilling CEO Danie Pretorius, Fochville, South Africa. But the risk-reward split doesn't need to be 50-50 for a project to be worthwhile. “You could have a 30 percent chance of success and it could still be worth doing,” Mr. Pretorius says. “We consider ourselves a technology company, and that requires innovation.” —Sara Bongiorni