What Next for Australia's Diamond Industry?
Australia is a land rich in natural resources. An international mining powerhouse, our continent is well known as a key global source of gold, iron and coal amongst dozens of other minerals, but less understood is our unique place in the diamond industry.
Up until the end of 2020, Australia was home to one of the most productive diamond mines in the world. The Argyle Diamond Mine in the East Kimberley region of Western Australia was at times the largest diamond producer in the world, responsible for more than 14 million carats in a single year – representing the majority of Australian output.
But all mines have a finite lifespan. In November of 2020, Rio Tinto Group – the mine’s operators – ceased excavation at the Argyle, citing the likely unprofitability of further exploration. It’s in this vacuum we now find ourselves. While the closure of the Argyle has had a significant impact on the Australian diamond industry, it is not the end of the sector. Join us as we examine the impacts of the closure of the Argyle and look at the future of Australian diamond mining.
How has the closure of the Argyle changed the Australian diamond industry?
The most significant impact of the end of the Argyle has been a steep and immediate drop in not only Australian diamond output, but global output of gem-quality pink diamonds. As the country’s only fully operational dedicated diamond mine, the Argyle was responsible for the vast majority of diamonds mined from Australian soil – as much as 90% of Australia’s total diamond output. In short, the closure of the Argyle has shrunk Australian diamond output to as little as a tenth of its original size overnight.
Crucially, the Argyle was also responsible for more than 90% of the world’s pink diamonds – an extremely rare and highly sought-after type of fancy coloured diamond that regularly fetches millions per carat at auction. A true geological abnormality, the Argyle produced significantly more pink diamonds per tonne of ore than any other mine on Earth, with just under 1% of the gem quality diamonds mined at the Argyle being pink, compared to a global average of about 0.1% occurrence. The loss of the Argyle means a loss of the majority of the world’s pink diamond supply, making these already rare and expensive stones that much more elusive and valuable.
What’s next for the industry?
The closure of the Argyle puts the Australian diamond industry back into an exploratory mode. While no strict like-for-like replacement for the Argyle has been found, Australia’s vast wilderness offers significant potential to companies willing to invest the time and capital in exploration, with several promising candidates emerging in the last decade.
With no new viable sources of Australian diamonds, the attention should be spanned to other jewels and gemstones that are local, namely the Australian Sapphire. Sapphires portray a broad spectrum of colour, most notably the tri-coloured Parti Sapphire which are only mined in abundance in Australia, thus setting it up to be the next big investment gemstone. Alternatively, several other sites across the country are being considered, but with only negligible samples of diamonds discovered at Little Spring Creek in Western Australia.
Regardless, 2021 still has much to offer the world in terms of pink diamonds. The final Argyle Tender promises to be one of the most extraordinary in the event’s 38-year history, and we at Pink Kimberley will be watching with anticipation as the stones are showcased.