Rapaport Magazine

Staying Alive

Venetia diamond mine: Going…going…going underground.

By Ettagale Blauer and Jason Lauré

The terraced pit at Venetia shows the depths reached after 22 years of mining.
All photographs by Jason Lauré

A diamond may be forever, but a diamond mine is not. Even the most productive mines have finite lives, determined by the cost of mining relative to the number and quality of the diamonds unearthed. The crucial moment arrives when mining operations at an open-pit mine have gone as deep as they can go. For Venetia, the De Beers South African mine that was commissioned in 1991, that moment will be reached in 2021, a scant seven years from now. What is a bottom-line-focused mining company to do? The not-so-simple answer is: Sink a shaft and continue mining — underground. After all, as De Beers Consolidated Mines (DBCM) Chief Executive Officer (CEO) Phillip Barton says, “It is a fantastic ore body and the grades continue at depth.” Whether open-pit or underground, the Venetia mine is expected to continue producing diamonds at the rate of some 4 million carats a year.

In the Beginning
   Science, art and nerves of economic steel, plus a bit of crystal ball gazing, go into deciding where to invest billions of dollars to break ground on a new diamond mine.When DBCM first put a shovel into a desolate area in Limpopo Province in the northeast corner of South Africa near the borders of neighboring Zimbabwe and Botswana in 1992, it made history on a number of levels. Venetia was the first new diamond mine in South Africa in 20 years. It came on the cusp of the nation abandoning its apartheid policies and whites-only rule in 1994 for an inclusive, multiracial-based economy and government. Strikingly, for anyone who has been to a traditional gold or diamond mine in South Africa, the Venetia operation did not house workers in single-sex hostels nor did it segregate white and black workers. The majority of the permanent workforce is located in Musina, about 50 miles from the mine, and the town of Alldays, about 20 miles away, and the company provides buses to transport them to the worksite. Everyone who works at the mine has a “matric,” equivalent to a high school diploma. Mines are worked 24/7 and require workers with a full range of skills. In all these ways, Venetia was groundbreaking.
   It was in keeping with DBCM’s intention to provide meaningful employment in areas of South Africa that are isolated from major cities and from well-paying work opportunities that the company extended its hiring practices to women. Today, 19 percent of the workers at Venetia are female. Women are employed at the mine not just in clerical or housekeeping positions but across the board as artisans, engineers, metallurgists, geologists and mining supervisers. The company also sponsors “Women in Mining” forums to discuss issues uniquely faced by female workers in the industry, such as the need to balance work and family responsibilities.
   The decision to open Venetia was based on expectations of a big payoff. As South Africa’s historic mines, including Kimberley and Cullinan, were becoming too costly to operate because their yields were declining, this youngster became the biggest producer of rough in South Africa. According to Venetia’s General Manager Ludwig von Maltitz, “Since the commissioning some 23 years ago, about 100 million carats have been mined. Currently, production averages 3 million to 4 million carats a year.”

The Long Haul
   Although Venetia comprises 12 kimberlite pipes, only two are being worked — K1 and K2 — within the one open-pit mine. Ultimately, the open pit will reach a depth of 1,300 feet to almost 1,500 feet. Each pipe yields different numbers of carats per 100 tons of ore mined, a crucial aspect in determining whether to invest in the enormous expense of creating an underground mining operation. K1, for example, produces 250 carats per 100 tons while K2, right next to it, produces just 80 carats per 100 tons.
   De Beers takes a very long view of its diamond mining projects, based in part on the high cost of creating a new mine against the expected return. Geologists determine the expected return per 100 tons of ore mined, which gives the moneymen the data needed to make the decision.
   Operating an open-pit mine also requires a substantial investment in machinery. Each of the gigantic shovels scoops up 60 tons of ore at a gulp. Four of these shovelfuls make up the loading capacity of each of the mammoth trucks that rumble along the terraces on their way to the adjacent processing plant. These trucks, some of them driven by women, dwarf their human operators. From the edge of the pit, though, the scale of the mine is so vast that even these enormous machines seem little larger than Matchbox toys. At the processing plant, crushers reduce the ore in size, after which diamonds are recovered from the crushed ore. A whole Rube Goldberg array of equipment is used to separate the diamonds from the waste. Because the miners work around the clock, De Beers wanted to avoid driver fatigue, which could lead to accidents. A fatigue prevention plan monitors drivers as they work. If a driver shows fatigue, he is instructed to take a break.
   Every mine that is worked to the ultimate depths possible faces an inevitable end. As the terraces are dug into the pit, they run in ever-smaller concentric circles until the area is too small to accommodate the shovels and scoops. Venetia will reach that point in the year 2021, when the pit reaches a maximum depth of approximately 1,500 feet.
   The company looked at Venetia’s diamond reserves, measured that against the $2 billion needed to convert the open-pit operation into an underground mine and decided to go ahead. But where to start the conversion process? What was the optimal point to start building an underground mine while still operating the open-pit mine? It’s a bit like trying to insert another card at the bottom of a carefully constructed tower of playing cards.

Making The Decision
   Steffan Herselman, senior mining manager for the Venetia Underground Project, explains how the decision was made. “The selection of the portal area underwent a feasibility study with five areas identified throughout the mine as possible locations. This was reduced to two locations on either side of the main terrace within the underground surface footprint.” The other three areas offered access, geological or managerial challenges. Of the two remaining options, Herselman notes, “the one on the east was preferred as it mined into the hill so it required a smaller box cut and could be completed faster. It also had a greater surface terrace area to construct the infrastructure to support the decline development.”
   The very first physical evidence of that decision could be seen during a visit to the mine at the end of March 2014. That’s when von Maltitz showed visitors a wall of rock, with an arched opening. This is the “portal,” the exact spot where the tunnel is being blasted into the earth to allow for the construction of the mine shafts. Just above this area, mine employees can be seen working on the reinforced concrete that will form the base of one of the two shafts to be sunk to a depth of more than 3,000 feet.
   The project to turn Venetia into an underground mine will coincide with the closing of the open pit in 2021 and will extend the life of the mine to 2042. De Beers calculates that the underground mine will yield a total of 96 million carats during its lifetime.

The Benefits
   The impact of the mine on local employment is enormous. According to von Maltitz, the open-pit mine employs about 3,000 people in total. That will rise dramatically during construction of the mine shafts and by 2021, he states the operation will support 1,482 at the mine and another 5,143 in ancillary jobs related to the mine. “Underground mining offers a new platform for skills development,” von Maltitz explains. “People have the opportunity to transition from open pit to underground and it will provide long-term employment, adding another 20 years to the life of the mine and to associated local businesses.”
   The impact is not just on employment. In parts of Africa where job opportunities have been severely limited, especially for black Africans, employers such as De Beers find it beneficial to improve schooling, housing and social conditions for the entire community. At Venetia, De Beers has worked to help build nearly a dozen new schools, as well as to provide both technical and nontechnical training for adults through its on-site Skills Development Center.
   At such future time as the mine resources are finally depleted, Venetia will be left with the country rock, also known as host rock, surrounding the diamond-bearing kimberlite, as well as the tailings from the kimberlite. The country rock will be rehabilitated by De Beers in a process that involves introducing local vegetation to the hills. The goal is that, over the years, the site where the mining operation once stood should blend into the landscape. Unlike at gold mines, no noxious chemicals are used in the diamond recovery process so the rehabilitated landscape doesn’t contain residual chemicals.
   Venetia was a groundbreaking mine when it opened in 1992 with its emphasis on equal employment opportunities across races and sexes and environmental rehabilitation. With the decision to move the mining operation underground, extending the life of the mine until 2042, DBCM is demonstrating a commitment to the region as well as to the future of the diamond industry.

Article from the Rapaport Magazine - September 2014. To subscribe click here.

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