Ellendale Mine Gets New Lease of Life

Mining and Exploration
23/12/2019 10:12

The former Ellendale diamond mine area in the West Kimberley region of Australia is heading towards a new lease of life, as Mines and Petroleum Minister Bill Johnston has announced that Gibb River Diamonds has accepted his offer to apply for a new lease to mine at Ellendale and has invited India Bore Diamond Holdings to apply for other tenements at the site. The Ellendale Project was mined from 2002 to 2015 and previously produced about half of the world's highly valued Fancy Yellow diamonds, of which US jeweller Tiffany & Co was a major client, having negotiated in 2010 exclusive rights to the fancy stones for the full economic life of the mine.

The governent's Department of Mines, Industry Regulation and Safety (DMIRS) says it has undertaken geological re-examination of the ground that confirms there are prospects of further discoveries. However, before mining activities can commence, the companies will need to undertake more diamond exploration in their new tenure, conduct extensive consultations with key stakeholders in the region and develop mining plans for approval. "It's not going to happen overnight, but restarting mining operations at the former Ellendale mine will be a high point in the rejuvenation of diamond exploration and mining in the Kimberley," Johnston commented.

The Western Australian Government started seeking expressions of interest to reopen and operate the Ellendale diamond mine back in August of 2018. Mining operations ceased in July 2015 when Kimberley Diamond Company (KDC) entered into administration. KDC went into liquidation the following month amid controversy, owing millions to creditors, unpaid workers and rehabilitation costs for the mine, which the state eventually inherited (search 'Ellendale' in our archive for background). At the time, Minister Johnston said, "We are looking for a company that will bring fresh eyes and a new approach which will result in a successful restart of mining operations.” He said that there were still materials known to contain diamonds when the former operation closed. “This is a rare opportunity for a suitably qualified company with the ability to mine diamond ore, process it and then market the diamonds." It now appears they have found not one, but two companies.

Gibb River Diamonds (GRD, formerly known as POZ Diamonds) was interested from the start, submitting a bid when the DMIRS first made its call for investors. GRD  already own the adjacent Blina Diamond Project, whose alluvial sites surround and are derived from the Ellendale 9 diamond pipe. The company believes the joining of these two diamond projects under common ownership would create significant commercial advantages and synergies, particularly in the market for yellow diamonds.