De Beers To Keep Diamond Exploration Budget at $35M

Mining and Exploration
06/02/2017 17:20

As in previous years, De Beers has allocated $35 million to diamond explorations and, in an effort to improve the rate of discoveries, will be implementing new technology. Mining companies have cut exploratory spending due to the 2015 slump in commodity prices, as well as the widening gap between expenditure and the value of resources found, as the best quality ores are reportedly depleted. "Our exploration spend this year is likely to be in line with last year's, around $35 million,” said De Beers.

The high-tech detection method that De Beers is employing measures tiny magnetic field shifts that indicate the presence of a kimberlite pipe, which is where diamonds are found, well below the surface of the earth. According to De Beers figures, between 2000 to 2013 the industry as a whole reportedly invested nearly $7 billion on explorations, with meagre results. Only one diamond deposit of significant size was discovered, Bunder in India, which was found by Rio Tinto in 2004.

Last year De Beers started producing at a new mine in Canada, Gahcho Kué, which despite being the world's largest new diamond mine would not result in a supply surge, as it was only helping to replace diamonds that had previously been sold. In order to remain the biggest producer by value, De Beers has a policy of balancing production and demand. Diamond sales recovered in 2016 as the entire industry bounced back from a 2015 slump brought on by oversupply and low-demand. Sales of smaller grade stones, however, were hit at the end of the year by India's demonetization, as consumer spending in the largely cash economy was constrained.