Johannesburg - Junior miner Petra Diamonds is making major changes to the processing plant at its Cullinan mine near Pretoria to improve the recovery of large diamonds.
This was disclosed during a media site visit on Thursday by technical director Jim Davidson, who said Petra intended running the recovery processes in a way that would "protect" large diamonds in the 500 to 600 carat category.
Petra bought Cullinan from De Beers for R1bn in 2008. Davidson commented Petra would go for greater recoveries of larger diamonds, whereas De Beers had run the mine to maximise production volumes.
Petra CEO Johan Dippenaar pointed out the beneficial impact of recovering a few more large diamonds was far greater to a small producer like Petra than to a huge one like De Beers.
Davidson said the key technical changes were to increase screen size and crusher settings in the processing plant.
On previous settings, diamonds greater than about 200 carats risked being smashed up in the crushers. On new ones, stones up to 600 carats should be recovered intact.
Davidson pointed out Cullinan had a long history of producing large stones greater than 100 carats, but the numbers recovered since 2003 had fallen "significantly".
According to mine statistics, 14 diamonds larger than 100 carats were recovered in 1996 and 9 in 2002. Only two diamonds in this category were recovered in 2006.
Davidson said: "This performance is all related to the plant because the orebody has not changed. We intend getting recoveries back to the previous higher levels."
The changes to the processing plant are also linked to modifications Petra intends making on the mining side.
Mining operations are about to move into the BA west (BAW) section of the underground workings from the current focus on the eastern side of the mine.
"The western side of the mine has traditionally delivered large D flawless diamonds as well as blue diamonds when compared with the eastern side," Davidson said.
Dippenaar said the BAW operations would provide Cullinan with 20 years of economic life, producing up to 1m carats annually.
He said Petra had no plans at this stage to cut back on production, despite dropping prices and sales volumes in the international rough diamond markets.
Special diamond sales
"We are a small producer selling about 1m carats annually into a market that totals about 160m carats. We do not believe cutbacks by Petra are going to make much of a difference to the market compared with cutbacks by the major producers such as De Beers and Alrosa."
In the six months to end-December, Petra achieved an average value per carat of $91 but Dippenaar would not be drawn at this stage on the likely impact of the sharp drops in diamond prices that had taken place over the past month.
He said Petra had not yet sold diamonds in 2009 as the first tenders were still under way, but he commented reports in the markets were that some diamond prices had halved.
Dippenaar believed that Cullinan's average values would be protected by the sale of special diamonds the mine produced regularly, such as the 39 carat blue diamond found in 2008 which sold for $8.8m.
A 26 carat blue of even better quality had yet to be sold and was included in the 156 000 carats Petra held in stock at the end of December.
Asked about the future of the "C cut" - a project which involves a major deepening of the mine - Dippenaar said Petra's intention was to first establish the new operating parameters of Cullinan under its management compared with De Beers.
These parameters include working costs, diamond recoveries and diamond values.
That would take about two years. After this, Petra would evaluate the C-cut project looking at whether it would follow a phased approach to development or go for a new "mega-mine" as De Beers had originally planned.
- Miningmx.com
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