The 39-carat blue
diamond that Petra
sold for US$8.8
million (R90 million)
 
Johannesburg, South Africa — MININGREVIEW.COM — 26 January 2009 – 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 to Fin24 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. He said Petra would go for greater recoveries of larger diamonds, whereas De Beers – from whom Petra bought Cullinan for R1 billion in 2008 – had run the mine to maximise production volumes.

Davidson explained that 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 shattered in the crushers. On the 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 had been recovered in 1996 and nine in 2002. Only two diamonds in this category had been recovered in 2006.

“This performance is all related to the plant, because the ore body has not changed,” he said. “We intend getting recoveries back to the previous higher levels.”

Petra CEO Johan Dippenaar pointed out that 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.

The changes to the processing plant are also linked to modifications Petra intends making on the mining side.

Dippenaar revealed that mining operations were about to move into the BA west (BAW) section of the underground workings from the current focus on the eastern side of the mine. These BAW operations would provide Cullinan with 20 years of economic life, producing up to 1 million 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.

Dippenaar added that Petra had not yet sold diamonds in 2009 as the first tenders were still under way, but he pointed out that 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 US$8.8 million. 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.