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Our Mines

Our portfolio incorporates major underground pipe mines and a large high-volume open cast mine

 
  • Cullinan

    Cullinan is one of the world’s most celebrated diamond mines and the source of the two largest diamonds in the British Crown Jewels

  • Cullinan

    Cullinan is one of the world’s most celebrated diamond mines and the source of the two largest diamonds in the British Crown Jewels

Cullinan

Cullinan is renowned as a source of large, high-quality gem diamonds, including Type II stones, as well as being the world’s most important source of very rare blue diamonds.

Cullinan earned its place in history with the discovery of the Cullinan diamond in 1905, the largest rough gem diamond ever found at 3,106 carats, which was cut to form the two most important diamonds in the British Crown Jewels. Many of the world’s most famous diamonds herald from Cullinan, and it continues to produce world-class diamonds under Petra’s stewardship.

Cullinan contains a ‘Tier 1’ diamond resource of 192.7 Mcts and the Company is capitalising on this by undertaking an expansion programme at the mine to take annual production to ca. 2.2 Mcts by FY 2019 (comprising ca. 2 Mcts ROM and ca. 0.2 Mcts tailings).

The ramp up of production from the C-Cut Phase 1 Block Cave (extraction level: 839 mL) will continue during FY 2018 and is expected to contribute in excess of 2.2 Mt for the year.

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Key Facts

Location Gauteng Province, South Africa
Size of kimberlite pipe at surface 32ha
Mine start date 1903
Acquisition by Petra Diamonds July 2008
Acquisition cost ZAR 1bn
Ownership Petra Diamonds Limited: 74%1
Kago Diamonds (Pty) Ltd: 14%
Itumeleng Petra Diamonds Employee Trust: 12%
Total Resources
(inclusive of Reserves)
192.74 Mcts
Current depth of Resources 1,073m
Mining Method Block cave
Depth of current mining 880m
Mine Plan To 2030
Potential Mine Life +50 years

1. Refer to Petra’s ‘Effective Interest in Mines’ in the following document: Analyst Guidance – Explanatory Notes

Heritage

The Cullinan kimberlite pipe was discovered in 1902 and open pit mining commenced at the ‘Premier’ mine (as it was then known) in 1903. Ore extraction has been by underground mining methods since 1946. Ore extraction has varied between 2 and 5 Mt per annum and ore treatment between 2 and 7 Mt per annum.

The mine was renamed ‘Cullinan’ as part of its centenary celebrations and to link the mine to the illustrious heritage of the Cullinan diamond, which provided the two main polished diamonds within the British Crown Jewels (the 530 carat Great Star of Africa and the 317 carat Lesser Star of Africa).

Petra initially acquired a 37% interest in the Cullinan mine from De Beers in 2008, but increased its direct interest in the mine to 74% in late 2009 when it acquired Al Rajhi’s holding in the mine. Petra continues to mine the underground resource using block cave mining methods.

Cullinan is renowned as a source of large diamonds and frequently yields diamonds larger than 10 carats.  Furthermore, it has produced over 800 stones weighing more than 100 carats, 140 stones weighing more than 200 carats, and around a quarter of all diamonds weighing more than 400 carats.

Cullinan is also renowned as the world’s most important source of blue diamonds, providing the collection of 11 rare blues displayed in 2000 at London’s Millennium Dome alongside the Millennium Star and which included the fancy vivid blue ‘Heart of Eternity’ (27 carats polished).

Since we acquired the mine in 2008, Cullinan has produced the following important diamonds:

  • A 39.9 carat diamond which sold for US$8.8 million in 2008.
  • A 26.6 carat diamond which yielded a fancy vivid blue and internally flawless 7.0 carat polished stone known as the ‘Star of Josephine’ and sold for US$9.49 million at a Sotheby’s auction in 2009.
  • A 507.5 carat white diamond known as the ‘Cullinan Heritage’ which was sold in 2010 for US$35.3 million.
  • A 25.5 carat blue diamond which sold for US$16.9 million in 2013.
  • A 29.6 carat blue diamond which sold for US$25.6 million in February 2014 and was then cut and polished into the perfect 12 carat ‘Blue Moon’.
  • A 122.52 carat blue diamond which achieved a value of US$27.6 million in 2014.
  • A 232 carat white diamond which was sold for US$15.2 million in September 2014.
  • Read more about our Diamond Heritage.

Other notable diamonds historically produced from Cullinan include the Premier Rose (353 carats rough), the Niarchos (426 carats rough), the De Beers Centenary (599 carats rough), the Golden Jubilee (755 carats rough) and the famous Taylor-Burton diamond (69 carats polished).

Reserves & Resources

Gross
Category Tonnes (millions) Grade (cpht) Contained Diamonds (Mcts)
Reserves
Proved
Probable 51.1 47.4 24.25
Sub-total 51.1 47.4 24.25
Resources
Measured
Indicated 249.4 70.4 175.46
Inferred 170.9 10.1 17.28
Sub-total 420.3 45.9 192.74

1. Resource bottom cut-off: 1.0mm.
2. Reserve bottom cut off: 1.15mm.
3. B-Cut resource tonnes and grade are based on block cave depletion modelling and include external waste.
4. C-Cut Resource stated as in-situ.
5. Reserves based on PCBC simulations on C-Cutph1, BB1E, AUC, and Mine2-4D schedules for CCIE and other remaining pillar retreats.
6. Factorised grades and carats are derived from a calculated Plant Recovery Factor (“PRF”) for the new Mill Plant. These factors account for the efficiency of sieving (bottom cut-off), diamond liberation and recovery in the ore treatment process. The Mill Plant is in a commissioning phase as of June 2017, and the PRF will be refined based on production data.
7.US$/ct values of 115-120 for ROM and 60-65 for tailings guided for FY 2018, based on sales values and production size frequency distributions.

FY 2017 Results

Unit FY 2017 FY 2016 Variance
Sales
Revenue US$m 91.3 83.3 +10%
Diamonds sold Carats 760,957 663,175 +15%
Average price per carat US$ 1201 1262 -5%
ROM Production
Tonnes treated Tonnes 1,882,911 2,302,892 -18%
Diamonds produced Carats 679,622 643,724 +6%
Grade Cpht 36.1 28.0 +29%
Tailings Production
Tonnes treated Tonnes 506,176 886,289 -43%
Diamonds produced Carats 106,887 37,089 +188%
Grade Cpht 21.1 4.2 +402%
Total Production
Tonnes treated Tonnes 2,389,087 3,189,181 -25%
Diamonds produced Carats 786,509 680,813 +16%
Costs
On-mine cash cost per tonne treated ZAR 316 257 23%
Capex
Expansion Capex US$m 120.9 156.2 -23%
Sustaining Capex US$m 4.3 7.3 -41%
Borrowing Costs Capitalised US$m 26.0 15.9 +64%
Total Capex US$m 151.2 179.4 -16%

Notes:

1 Excluding exceptional diamonds, the average value per carat for FY 2017 was US$113 and for FY 2016 was US$109.

Cullinan’s production increased 16% to 786,509 carats (FY 2016: 680,813 carats), but performance was below planned levels due to the delay in bringing on-stream the new Cullinan plant. As a result, ca. 400 Kt of ROM stockpile is available for treatment during H1 FY 2018.

While the plant delay was disappointing, it is encouraging that Cullinan’s new block cave, known as C-Cut Phase 1, has progressed in line with expectations. ROM production from the new block cave reached 940 Kt for the Year, in line with guidance, driving the 29% improvement in the ROM grade for H2 FY 2017 to 38.0 cpht, giving a full year grade of 36.1 cpht (FY 2016: 28.0 cpht). However, this H2 grade was lower than planned, due to the late start of the new Cullinan plant and the associated benefits of improved diamond liberation.

Mine Plan

Cullinan contains a ‘Tier 1’ diamond resource of 192.7 Mcts (including 17.3 Mcts in tailings) and the Company is capitalising on this by undertaking an expansion programme at the mine to take annual production to ca. 2.2 Mcts by FY 2019 (comprising ca. 2 Mcts ROM and ca. 0.2 Mcts tailings).

The ramp up of production from the C-Cut Phase 1 Block Cave (extraction level: 839 mL) will continue during FY 2018 and is expected to contribute in excess of 2.2 Mt for the year.

Mining Right

Cullinan Diamond Mine (Pty) Ltd (“CDM”) holds a valid new order mining right (the ‘‘Cullinan Mining Right’’) dated 4 December 2007. The Cullinan Mining Right was initially granted to De Beers pursuant to Item 7 of Schedule II of the MPRDA and was ceded to CDM by a notarial deed of cession on 1 July 2008 pursuant to section 11 of the MPRDA and duly notarially executed and registered in the Mineral and Petroleum Titles Registration Office. .

The Cullinan Mining Right confers on CDM the exclusive right to mine for diamonds in relation to the areas it refers to until 3 December 2037. Pursuant to the MPRDA, the Cullinan Mining Right is renewable (for periods of up to 30 years for each renewal) on the basis more fully set out in section 24 of the MPRDA.

Section 2 of the Royalty Act requires CDM to pay the South African Government a royalty for minerals recovered under the Cullinan Mining Right. Pursuant to section 4 of the Royalty Act, the royalty is to be paid on gross sales in accordance with a defined formula set out in the Royalty Act. The formula applicable to rough diamonds is as follows: 0.5% + (earnings before interest and taxes, as defined in Section 5 of the Royalty Act / (gross sales x 9) x 100) but not exceeding 7%.

In addition, South Africa has a rough diamond export levy requirement of 5% as set out in section of the Diamond Export Levy Act 15 of 2007 (“Export Levy Act”). Producers are however exempt from this levy in respect of production that is exported provided that a certain percentage of their production is sold to local diamond beneficiation licence holders, on the basis more fully set out in sections 7, 8 and 9 of the Export Levy Act.

CDM is also subject to corporate tax in South Africa at the rate of 28% in terms of section 5 and other provisions of the Income Tax Act 58 of 1962.

There are no fiscal stabilisation provisions in place in relation to Cullinan Diamond Mine.

New Cullinan Plant

In September 2017, Petra completed the construction and commissioning of a modern, fit-for-purpose processing plant at Cullinan, with a throughput capacity of 6 Mtpa.

This has replaced the previous plant at Cullinan, which was originally commissioned in 1947 and which had  undergone numerous refurbishments over the years.  Due to its age and operational complexity, it had become expensive to maintain, requiring significant stay-in-business capex, and costly to operate, particularly given the large size of its 26 ha footprint. The plant was also based on old crushing technology, which is known to impact large stone recoveries as while diamond is the hardest substance known to man, it cannot take impact and therefore very large stones can be shattered using conventional processing techniques.  At the same time, the energy efficiency of the old plant was not aligned with the Company’s vision.

The design of the new plant was therefore planned to address these shortcomings and was considered an important factor in setting out a long-term sustainable future for the mine.

The new plant utilises gentler processing methods (comminution via attrition) instead of extensive crushing in the form of autogenous milling and high pressure grinding rolls, which are expected to reduce diamond breakage and improve recoveries across the full spectrum of diamonds, including the larger/exceptional stones for which the mine is rewnowned (the top-cut of 75mm will cater for diamonds of +3,000 carats, such as the Cullinan diamond).

In addition, the new plant has been designed to improve the efficiency of the material flow, thereby significantly lowering operating costs, and has a significantly smaller footprint of just 5 ha, with the associated reduction of engineering infrastructure deployed, including a reduction in:

  • the number of conveyor belts used from 151 to 22 (from 15 km to just 3 km);
  • the number of water pumps used from 121 to 9; and
  • the number of electrical motors from 589 to only 84.

In efficiency terms, these changes will give effect to improvements of 12% in electricity consumption (as expressed in kWh/t) and a staggering 65% in water consumption (0.17 m3/t to 0.06 m3/t).

This is a good example of how Petra has applied the integrated environmental management principle of ‘Cradle to Grave’ planning for a new project as it has embedded environmental efficiency into the process.

 

New Cullinan Plant Presentation

New Cullinan Plant Press Release

Cullinan Tours

Tours of the Cullinan mine

To arrange a tour of the famous Cullinan mine and learn more about its rich history and heritage, use this link.

Highlights

  • July 2008 Acquisition by Petra
  • 786,509 carats FY 2017 Production
  • 193m carats Total diamond resource

Map

Cullinan Diamonds

An exceptional 29.6 carat blue diamond – January 2014

Petra Diamonds - HOH Sorting Floor KimberleyA 126.4 carat white diamond – November 2013