info on diamond mining Visual Capitalist Feature: A Clear Look at Diamonds
How Diamonds Form
- Kimberlite and Lamproites are carrot shaped deep-origin volcanic eruptions
- 1 in 200 volcanic pipes contain gem-quality diamonds
- Magma itself does not have diamonds, but acts as an elevator to bring up diamonds coming from depth
- Diamonds coming to earth’s surface are old, ranging from 1-3.3 billion years old. 22%-73% age of Earth.
- Formed at depths between 140 – 190km where exact conditions exist for diamond creation (temperature + pressure)
- Meteorites
- Microdiamonds can be found at meteorite impact craters. Some impact events create shock zones of high pressure and temperature suitable for diamond creation.
Diamond Properties
- Hardest natural substance on earth
- Optical properties (brilliant, lustre, color)
- Unique. Every diamond is different because they are crystals that form with different sizes, colours, and defects.
Diamond Type and Colour
Diamonds get color from their impurities or structural anomalies.
Type 1 diamonds:
- 98% of gem diamonds have Nitrogen as a key impurity, which can make them white, light yellow, or light brown.
- 0.1% have nitrogen impurities, but more diffuse, making an intense yellow or brown color.
Type 2 diamonds:
- 1.8% are entirely devoid of impurities, but have structural anomalies that can give yellow, brown, orange, pink, red, or purple colour.
- 0.1% have boron impurities, that make them blue or grey.
- Green diamonds also can occur if a diamond is exposed to radiation
Diamond mining
- Because each diamond is unique, unlike other commodities, there is another measurement that must be considered to prove an economic deposit: diamond value. Each diamond has a unique value based on size and characteristics. Companies must take a bulk sample of at least 2000 carats to give an “average” for diamond value.
- Generally all diamonds from a similar volcanic pipe have similar characteristics
Market for diamonds
- 130,000,000 carats (26,000kg) of diamonds mined annually, valued at $13B (US) – global diamond retail sales: $72B
- 30% are gem quality, 70% industrial use. Industrial diamonds are valued for hardness and thermal conductivity.
- Gem diamonds are valued for clarity, color, cut, and carat (4 C’s). Given all other factors remaining the same, more carats mean an exponential increase in value. Clarity is how pure each diamond is and the number, size, color, location, orientation and visibility of defects. Colourless diamonds (white) are graded on a scale from D to Z, with Z being light yellow. Rare and desirable colors are red, green, purple, blue, orange, and pink. Cut refers to quality of workmanship and angles to reflect maximum amount of light. Quality of cut is the most important of 4 C’s.
Demand: Economic growth and demographics
- China/India to drive diamond demand through newly affluent population. In the world diamond retail market, Asia in 2005 made up 23% of purchases. In 2020, they will make up 57%!
- By 2020, China’s GDP on a PPP (purchasing power parity) basis is forecast to grow 190% to 28 trillion! This would be the highest in the world.
- Supply is to decline as mines go deeper and underground, with no significant new mines starting production.
- 92% of world’s diamonds are cut and polished in India, mostly in the city of Surat
- 85% of world’s rough diamonds, 50% of cut diamonds, and 40% of industrial diamonds are traded in Antwerp, Belgium, the diamond centre of the world.
- 2-3% of diamonds traded today are conflict diamonds (from unstable West or central African countries where mines are controlled by rebels)
- Highest ever auction price paid for diamond: $46m for Graff Pink, a rare 24.78 carat pink diamond by Laurence Graff (UK)
- Cullinan the largest rough gem-quality diamond ever found at 3,106.75 carats (621.35g). Found in South Africa and divided into 9 polished stones. The largest stone, Cullinan I has an estimated value of $400m.
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