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Sunday, May 21, 2006

Cost of Operating a Diamond Mine

A question that surely weighs heavily and inexorably on the minds of the readers of Tidbits--and any other breathing human being for that matter--is unquestionably this: Is there a cost versus location situation when it comes to operating a diamond mine? In other words...is it more or less expensive to operate a diamond mine in the valley than on the mountain top? The answer to this tantalizing rebus is that it makes no difference at all. The reason is in the final product. Unlike gold or iron or copper or lead...we don't need enormous carting facilities like railroads and pipe lines to ship out the day's yield. One hundred million dollars worth of product can weigh only a couple of pounds at most...and can be hauled away in a light aircraft.

South Africa. Land of the lion, the leopard, the cheetah, and the diamond. Our gem is in good company. Ten thousand feet up, over the Lesothan mountains, our plane heads directly into a mountain wall. Mists hang heavily in the air. Suddenly, micro-seconds before what is surely destined to be a crash, a landing strip appears and we touch ground with little bump. Brigadoon? Well...close, but no cigar. We're in Letseng-La-Terai--the highest diamond mine in the world. We're on the roof of Africa. Welcome my friends. Let's stroll about, shall we?

Against the side of the mountain is a square tower--a citadel of iron reaching through the fog. It's the separation plant. Large stones are the mainstay of this operation...large being defined as any rough diamond weighing over 14.8 carats. This plant produces about 200 such stones a year, and it is only one of two where large stones are regularly gleaned, the other plant being in Sierra Leone. Hit a forty carat rough gem, you got a half a million dollars coming into the coffers.

It's the fifteenth of the month. A bell begins to clang with grating persistence. A large diamond has just been found...the first one this month, and it is for it the bell tolls. There's excitement in the air. The mine needed a find like this in order to remain solvent. There was an ever increasing belief that the mine was tapped out with larger goods. Everyone hurries to the sorting house. Relief is in the air. For now, the mine will not have to be closed...though it needs two or three such finds a month in order to survive.

It weighs fifty eight carats. It's is top grade color quality. How much will it bring in? As a rough...about 340 thousand dollars. Maybe a little more. This money will support the mine for two weeks...then that's it. Another one better be found soon. This enterprise employs 800 workers at an average gross collective salary of 20 grand a week for labor alone. If you take in the salaries of the engineers and other support crew... supervisors etc., cost of fuel and machinery...our little mine residing as close to heaven as a mine can get...cost about 150,000 dollars a week to operate. One diamond a month, clearly, doth not do it. The logistics are overwhelming. This mine needs to sort through three to four tons of kimberlite-- the material in which diamonds are found--in order to glean one single carat of diamonds.