Location, Location, Location

Deciding where to put your production and/or manufacturing facilities is important in supply chain management. The location of each facility involved in the chain requires a commitment of resources, transportation considerations, costs, revenue, access to markets, and whatever limitations or rules are in place that governs the country of the location. Making good decisions in the beginning of the supply chain include consideration of strategy and operational goals. For the supply chain to work more efficiently, all parties involved from raw material suppliers to consumers and everyone in between will need to work collaboratively.
For the diamond trade, the first part of the chain begins in selecting a place to mine diamonds. The choices are limited and have many things to consider as the choices all involve international issues. Currently, there are eleven major diamond producing nations with operational and/or historic alluvial, open pit, and hard rock diamond mines. There are also several African nations with ongoing off-shore dredging/vacuuming operations.
Diavick Open Mine


Regardless of how diamonds are mined, there is an enormous investment required. Technical skills are necessary to construct, maintain and operate a mine. Diamonds are found in kimberlite. Kimberlite is a type of volcanic rock. Kimberlite occurs in the Earth's crust in vertical carrot shaped structures known as kimberlite pipes. Kimberlite pipes are the most important source of mined diamonds today.
The key to sustaining an advantage in mining lies in utilizing the mining techniques that is most suitable to the conditions. In open pit and underground mines, the ore is crushed to uncover the diamonds. Coastal mining involves the excavation of sand to find diamonds. Undersea mining entails drilling into the seabed to recover diamond-bearing gravels. Riverbed mining is often on an informal, smaller scale -- also known as artisanal digging -- and involves the most basic of equipment, such as sieves and pans, to find diamonds. Mined diamond production in 2005 was about $12.7 billion, with operation costs around $4.7 billion and has been increasing.
The largest producer in world is the Argyle Diamond Mine in Australia; however, it mainly produces industrial grade diamonds. The top three gem quality diamond producers are Botswana, Russia, and Canada.

Canadian Diamonds

Canada's diamonds have gained a reputation for their quality. They are also considered "clean" in that they are not used to finance terror, war or weapons. Canada is the world's third-largest producer of diamonds, providing 15% of the world's supply. Canadian diamonds are located in the Canadian Arctic, and were only recently discovered in the last 20 years. When Canadian diamonds were found, a priority was placed on negotiating mutually beneficial agreements with local indigenous populations and respecting the Arctic environment. Most Canadian diamonds originate from two mines, the Diavik and the Ekati.
The Ekati mine is Canada's first diamond mining operation. Prospector Chuck Fipke discovered the Lac de Gras kimberlite pipes in 1991. The Ekati mine began operations on October 14 1998. This mine now produces an average of three million carats of rough diamonds every year. Diamonds from the Ekati mines are found in 45 to 62 million year old kimberlite pipes which lie directly underneath shallow lakes formed in inactive volcanic calderas or craters (crater lakes). Diamonds from the Ekati Mine are sold under the trade name "Aurias" and their authenticity is verified through the "CanadaMark" service, operated by BHP Billiton Diamonds Inc. BHP Billiton Group is the world's largest diversified resources company. The Ekati Mine laser-engraves each diamond with the Ekati logo and a unique serial number signifying its authenticity and Canadian origin. The laser-engraving is only visible under magnification and using special light filters.
The Diavik is an open-pit diamond mine located approximately 20 kilometers south-east of the Ekati mine. The Diavik Mine is built over four kimberlite pipes
that lie directly beneath the existing shallow lake-bed of Lac de Gras. The mine began construction in 2001 and mining production commenced on January of 2003. The Diavik diamond mine is a joint venture between the Aber Diamond Corporation and Diavik Diamond Mines Inc., a subsidiary of Rio Tinto Group and was built for a cost of 1.13 billion dollars. The Diavik mine is expected to produce 1.5 million tons of kimberlite ore material in its estimated 16-22 year lifespan. The mine employs about 700 workers and produces around eight million carats which equals approximately 90 million dollars of rough diamonds per year.
Due to the harsh weather conditions, access to the Ekati and Diavik mines is by air or a temporary ice road. The gravel landing strip can accommodate large jet aircraft.

Canada's third diamond mine, Jericho, officially opened in August 2006 and is owned by the Toronto-based Tahera Diamond Corporation. Other diamond mines in Canada include Snap Lake Diamond Project, Fort à la Corne Diamond Project, Victor Diamond Project, Gahcho Kué Diamond Project

Russian Diamonds

diamond_mining_russia_map.jpgRussia accounts for approximately 21% of global diamond production, most of which is mined in the Sakha Republic of Siberia, just below the Arctic Circle.
The Udachnaya mine is located within the Arctic Circle in the Sakha Republic. This is an open-pit mine located on a kimberlite field. The Udachnaya (meaning Lucky) pipe is the largest diamond deposit in Russia, and one of the largest in the world. The mine consists of two main bodies and is one of the largest open pits in the world. It has produced a high quantity of large diamonds.
The Anabar mine is also located within the Arctic Circle in the Sakha Republic. This mine is the northern-most location of Russia's diamond mines and is located along placer deposits from the Byllyakh and Anabar rivers. Anabar is primarily a surface mine operated during the short northern summer season due to harsh weather conditions. There are no annual roads in the region so cargo is delivered by frozen river during the winter.
Udachnaya Mine
The Jubilee Diamond Mine is the newest mine in the Sakha Republic, starting operations in 1986. The mine is constructed over the 'Yubileinaya' kimberlite pipe. This mine is operated by ALROSA. ALROSA is one of the world’s leading companies in the field of diamond exploration, mining and sales of rough diamonds, and diamond manufacture. ALROSA accounts for 97% of all Russia’s diamond production. Its share in the global rough diamond production is 25%.

African Diamonds

catoca_mine.jpgThere are many areas in Africa that have diamond mines, including Angola which has the Catoca mine, the fourth largest diamond mine in world. Conflict diamonds are usually associated with Angola, Congo, and Sierra Leone. Botswana boasts a huge margin of diamond production but all mines are owned by DeBeers. There are also mines in South Africa, including the Venetia Diamond Mine which produces over 40% of world's gem-quality diamonds. The Venetia diamond mine opened in 1992, and is the De Beers Company’s prize operation today. Both Tanzania and Zimbabwe also have mines owned by DeBeers.