WHEN the Argyle Diamond Mine finally closes, it will be remembered as one of the world’s largest and most successful mines of its kind.
Aside from the sheer scale of the project, which opened in 1985, the quantity and appearance of its diamonds – including elusive red diamonds – attracted unprecedented attention to the Kimberley. Thirty years on, the mine is still entrenched in the fabric of WA mining; its name remains synonymous with the region.
Since coming into operation, the mine has produced more than 800 million carats of diamonds, peaking in 1994 when 42mct were produced.
While leading the world in terms of quantity, the quality of diamonds is relatively low, with only 5 per cent being considered ‘gem quality’.
Early days at Argyle
Rio Tinto has managed Argyle since the 1970s, as the company has grown its market share and competed with traditional gem giant De Beers. The main source of the diamonds is a lamproite pipe known as AK1, which is said to have been discovered when a diamond was spotted in an anthill.
However, at the time of discovery the area was held by another company looking for uranium.
While Rio waited for the uranium lease to expire, all communication was sent in code and all available maps were purchased.
Rio (at the time known as CR A) purchased several blocks across the Kimberley, to throw rival miners off the scent.
In the ensuing decades, the open cut pit was blasted to extract ore, and haul trucks transported the diamond-bearing rock to crushers at the nearby processing plant.
In 2005, with open pit reserves nearly exhausted, the Rio Tinto board approved the recommendation to turn Argyle into an underground mine to extend its life.
Following a gradual transition period, the underground mine was officially opened in 30 April 2013 – extending the mine’s life to 2020.
The average rate of diamond production over the life of the $2.2 billion dollar block cave mine is expected to be 20mct per year.
At the opening ceremony, Rio Tinto diamonds and minerals chief executive Alan Davies said the extension of the mine would bring economic benefits to the region.
“The new Argyle underground mine has allowed us to extend the life of this iconic asset for Rio Tinto and Western Australia,” he said.
“I am proud that we can continue our contribution to local employment and economic development of the East Kimberley region, as we have over the past quarter of a century.”
Apart from reinforcing WA’s reputation as a strong mining state, Argyle has contributed to the local community – 70 per cent of the workforce lives locally and 1 in 4 workers are indigenous.
Argyle Diamond Mine managing director Kim Truter hailed the positive economic impact that the mine had on the local community.
“The mine life extension of Argyle to at least 2020, courtesy of the underground operation, will ensure sustainable benefits for the communities that we operate in,” Mr Truter said.
“Jobs, taxes and royalties are all critical for a vibrant economy and through these we deliver benefits to many stakeholders. “Beyond this we are involved in capacity building and partnerships to ensure we leave a positive legacy in this wonderful part of the world.”
Global demand for diamonds is expected to grow 5.9 per cent annually until 2020, while supply is only expected to grow 2.7 per cent in the same period.
Very few diamond mines have opened in recent times and, with the average mine taking 10 years and $1 billion to reach full production, Argyle’s extension is a welcome one.
Mr Truter said the opening of the mine ensured that there was a critical source of diamonds to feed customer demand in established markets such as Australia, Japan and the US, as well as the fast-growing emerging markets of China and India.
“The official opening of the Argyle underground mine on April 30 was a highlight for me, but more importantly, it was a highlight for all our partners in the Argyle mine,” he said.
“The partnership model is fundamental to the way we operate in the diamonds industry from the mine to the market place.
“Our upstream partnerships are with Traditional Owners, community groups, schools, not-for-profits and the like, and then as you travel further downstream we have engaged in partnerships with the Indian diamond industry where almost all the Argyle diamonds are cut and polished; and at the retail end we have partnerships with some of the finest jewellery houses throughout the world supporting their market development work in promoting Argyle diamond jewellery.”
Two of the world’s largest diamonds mines – Canada’s Ekati and Diavik – have exhausted their open cut potential and have also moved underground.
Rio Tinto holds a 60 per cent interest in Diavik, which produces 7.5mct annually. Other significant mines in Russia and China are also following suit.
Argyle is one of the most technologically advanced diamond mining projects in the world, utilising a block caving technique to keep costs down.
Argyle is the first block cave mine in WA and one of only a handful in Australia. Block cave mining involves undercutting the ore body and allowing it to collapse under its own weight, minimising the need for blasting.
Mr Truter said moving the mine underground was an immense engineering and geophysical challenge.
“The technique requires the manipulation of tens of thousands of tonnes of rock with considerable scientific monitoring and close management,” he said.
“About 40km of tunnels had to be built to the highest safety standards.”
The tunnels are specialised: some will be used for vehicles, some used as air vents and others for moving ore.
“The main thoroughfares in the underground network will be four tunnels – two to carry vehicles, one for ventilation and another for moving ore,” Mr Truter said.
“A honeycomb of cone-shaped funnels had to be developed through which diamond-bearing ore will fall, after being broken up by explosives.” Furthermore, there is a 2.2km underground conveyor belt that will move the ore to a 1.2km aboveground belt via crushers.
The diamonds are then acid-cleaned and sent to Belgium and India, for sorting and sale to an international customer base.Argyle diamonds come in a variety of colours including yellow, grey, blue, red and pink.
All diamonds are sent abroad except the famous and exclusive ‘pinks’. The rarest of the rare – the Argyle Pink Jubilee – is a rough pink diamond that was mined in 2011 weighing 12.76 carats.
When cutting of the diamond uncovered a major internal fault line, it was donated to the Melbourne Museum.
“The Melbourne Museum was selected as the final destination for the Argyle Pink Jubilee in order to preserve its special legacy,” Mr Truter said.
“The museum is home to Australia’s most comprehensive natural science display, and is a long-term partner of Rio Tinto.”
Rio Tinto is the only consistent producer of rare pink diamonds – of the 600 million stones mined only about 50 are included in the exclusive annual Pink Diamonds Tender.
The 2013 tender will feature 64 diamonds, including 58 pink diamonds, three fancy red diamonds and three blue diamonds.
It is the first time Argyle will showcase three fancy red diamonds at a tender. Argyle Pink Diamonds manager Josephine Johnson said it was the first time in eight years the tender had featured a diamond greater than 3 carats.
“Since mining began in 1983, only six diamonds certified as fancy red by the Gemmological Institute of America have been presented for sale at the annual tender,” she said.
“To have three of these rare red diamonds in one tender is a very special moment in time.
“The intrinsic beauty and unrivalled colour intensity of the red diamond is symbolic of its East Kimberley birthplace and the treasures that lie beneath the depths of the new underground mine.”
To commemorate the opening of the underground mine, Rio Tinto teamed up with the Perth Mint to create a limited number of gold ingots complete with a hand-set pink diamond.
Mr Truter said the ingots symbolised the progress the company had made.
“We are delighted to partner with the Perth Mint on the exclusive release of this distinctive investment piece,” he said.
“It is a beautiful symbol of the unique Argyle story and the recent milestone commencement of underground mining.”