Anthony Schofield (anthony.schofield@ga.gov.au)

Diamond is composed of carbon and is the hardest known natural substance, although it can be shattered with a sharp blow. It also has the highest thermal conductivity at room temperature of any known material. Diamonds form 150–200 kilometres below the Earth's surface at high temperatures (1050 °C–1200 °C) and pressures (45–55 kilobars). They are carried to the surface within kimberlite and lamproite magmas which intrude through the Earth's crust. These intrusions generally form narrow cylindrical bodies called pipes, but only a very small proportion has significant diamond content. When pipes are eroded, liberated diamonds can accumulate in alluvial deposits and may be found far from their source. This is because their hardness allows them to survive multiple episodes of erosion and deposition.

Current uses for diamond include jewellery, mining and exploration, stone cutting and polishing, computer chip manufacturing, machinery manufacturing, construction and transportation services. A large proportion of industrial diamond is manufactured and it is possible to produce synthetic diamonds of gem quality.


In the past, natural diamond quality has been subdivided into gem, near-gem and industrial categories. However, recent developments within the diamond industry mean that almost all natural diamonds are now used for jewellery, with only 1.4% of industrial diamonds being non-synthetic according to the United States Geological Survey (USGS). As a result, only total carats are reported here.

Australia's Economic Demonstrated Resources (EDR) decreased by 7% in 2011 for total diamond resources to 272.5 million carats (Mc).

Accessible EDR

All diamond EDR is accessible for mining.

JORC Reserves

The Joint Ore Reserve Committee (JORC) Code reserves account for 55% of Accessible Economic Demonstrated Resources (AEDR). The remaining AEDR comprise those Measured and Indicated Resources reported by mining companies, which Geoscience Australia has assessed as being economic in the long term.


Australia produced 7.6 Mc of diamond in 2011, 2.4 Mc less than in 2010 and about one quarter of that produced during the early to mid 2000s. Production during 2011 was almost entirely from Rio Tinto's Argyle mine, which produced 7.4 Mc. Production at Australia's two currently operating diamond mines, Argyle and Ellendale, fell in 2011 due to difficulties associated with an especially severe wet season and mining of lower grade ore.

World Ranking

As a result of the changes in the reporting of Australia's diamond resources described above, it is not possible to compare Australia's EDR for diamonds with the rest of the world based on USGS figures. In terms of overall production, Australia ranks as the world's seventh largest producer of diamonds by weight, down from fifth largest in 2010.

Industry Developments

Argyle (WA): During 2011, production continued at Rio Tinto's Argyle open cut operation, yielding 7.4 Mc of diamonds, including valuable rare pink diamonds. This figure is 24% lower than 2010 production of 9.8 Mc, reflecting the impact of delays and difficulties caused by high rainfall during 2010-11 wet season together with lower ore grades encountered during the final stages of open cut mining. An additional US$0.5 billion was approved for development of an underground mine in December 2011 in order to compensate the wet season delays and adverse exchange rates, bringing the total approved amount to US$2.1 billion. Production at Argyle is expected to transition from open pit to underground mining by 2015 and is expected to extend mine life to at least 2019 with forecast production of 20 Mc per year. In February 2012, Rio Tinto announced that it had discovered Australia's largest rough pink diamond, weighing 12.76 carats. Rio Tinto is currently undertaking a strategic review of its diamond businesses, including Argyle, which will include exploring a range of options for potential divestment of its assets.

Ellendale (WA): Gem Diamonds continued production from the E9 pipe at Ellendale, with the E4 pipe remaining on care and maintenance. Production from the E9 pipe was 0.12 Mc for 2011, compared with 0.16 Mc produced in 2010. Carat production was lower than expected in 2011 owing to an unusually severe wet season and associated ore processing complications, coupled with a lower than expected grade. The first half of 2012 saw improved carat recovery as a result of mining operations continuing during the wet season and modifications to the diamond processing plant. An average price of US$731 a carat was achieved in 2011, compared to US$475 a carat in 2010. Rare fancy yellow diamonds achieved an average price of US$4409. Other commercial diamonds achieved an average price of $188 a carat in 2011. Current mine life at the E9 pipe is relatively short, with approximately 18 months remaining based on the current mine plan and resource estimate. A resource extension program, intended to better define the diamond resource at Ellendale, was suspended in 2011. Gem Diamonds announced in November 2011 that it was conducting a strategic review into its diamond assets at Ellendale and on 3 December 2012 it was announced that the Ellendale diamond mine had been sold to Goodrich Resources.

Venus Smoke Creek (WA): Following announcements of an initial Inferred Resource of 21.5 million tonnes containing 6 Mc of diamonds in 2011, Venus Metals ordered and commissioned a modular diamond processing plant in late 2011 to evaluate the diamond resource at Smoke Creek. Processing of stockpiled diamond-bearing gravels commenced in mid-2012, with preliminary assessments indicating a high overall diamond quality. By September 2012, 14 samples totalling 2326 tonnes of gravel had been processed, yielding 550 diamonds, with the largest stone weighting 1.46 carats. Reported grades range from 0.167 to 3.219 carats per hundred tonnes, significantly below the initial estimated average grade of 28 carats per hundred tonnes and at variance with work undertaken by Argyle Diamond Mines during the 1980s and 1990s. Venus Metals is currently undertaking an audit to determine the cause of this discrepancy with the possibility remaining for higher diamond grades being identified.

Merlin (NT): Following the completion of prefeasibility production trials during 2010, a contract for a definitive feasibility study was awarded in August 2011. Studies aimed at re-establishing mining at Merlin were the focus of activity during 2012. The feasibility study has focused on hydraulic mining methods to extract the ore, which lowers the level of capital required and operational expenditure. The scope of this study was expanded to include an examination of borehole mining of deep kimberlite ore in mid-2012. North Australian Diamonds aims to begin mining at Merlin in early 2013. In addition to feasibility studies, a 3000 metre exploration drilling program at Merlin commenced in October 2012 to test geophysical and geochemical anomalies.

Borroloola (NT): A bulk sampling program commenced at Borroloola in September 2011 to test the potential of diamond-bearing gravels. Bulk sampling of three of the five targeted test areas (approximately three tonnes of material) yielded 22 diamonds with a total weight of 1.09 carats. Further assessment of the remaining two test areas is expected to commence following the wet season.