Our Mines

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

 
  • Kimberley Ekapa Mining JV

    Kimberley Ekapa Mining is located in Kimberley, the heart of South Africa’s early diamond rush

  • Kimberley Ekapa Mining JV

    Kimberley Ekapa Mining is located in Kimberley, the heart of South Africa’s early diamond rush

  • Kimberley Ekapa Mining JV

    Kimberley Ekapa Mining is located in Kimberley, the heart of South Africa’s early diamond rush

Kimberley Ekapa Mining Joint Venture

The town of Kimberley is perhaps the world’s most famous diamond producing area. It is where the first hard rock diamond deposits were discovered, hence the name ‘kimberlite,’ and was at the heart of South Africa’s early diamond rush. The Kimberley mines were subsequently integral to the economic development of South Africa as their output effectively financed development of the nascent gold industry.

The KEM JV is a joint venture between Petra and its partner Ekapa Mining and incorporates the Kimberley Underground mine (mining the Bultfontein, Dutoitspan and Wesselton kimberlite pipes), extensive tailings retreatment programmes (with total tailings resources of some 140.1 Mt) and the high volume Central Treatment Plant (“CTP”). The combination of these diamond mining assets in Kimberley has yielded cost synergies and allows for a mine plan to 2035.

+

Key Facts

Location Northern Cape Province, South Africa
Size of Kimberley Underground kimberlite pipes at surface Bultfontein: 10ha
Dutoitspan: 11ha
Wesselton: 9ha
Mine start dates Bultfontein: 1869
Dutoitspan: 1869
Wesselton: 1892
Acquisition by Petra Diamonds
– Kimberley Underground
– Kimberley Mines Assets
.
May 2010
Jan 2016
Acquisition cost
– Kimberley Underground
– Kimberley Mines Assets
.
ZAR 15m
ZAR 102m
Ownership* Petra Diamonds: 55.5%1
Itumeleng Petra Diamonds Employee Trust: 12%
Kago Diamonds (Pty) Ltd: 8.4%
Current depth of Resources 1,060m
Mining Method Sub level and block cave
Depth of current mining Bultfontein: 845m
Dutoitspan: 870m
Wesselton: 995m
Mine Plan to 2035
Potential Mine Life +12 years

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

Heritage

These mines were at the heart of South Africa’s early diamond rush in Kimberley in the late 1800s, where the world’s first hard rock diamond deposits were discovered, hence the name ‘kimberlite’. The Kimberley mines were integral to the economic development of South Africa as their output effectively financed development of the nascent gold industry.

The Kimberley mines were amalgamated into De Beers by 1890. The Dutoitspan pipe was mined as an open pit to a depth of 122 metres and Wesselton and Bultfontein were mined as open pits to a depth of 76 metres. The mines were then converted to chambering (a combination of shrinkage stoping and sub-level caving) as an underground mining method during the period 1890 to 1950. In the 1950s underground mining converted to the more efficient and safer block caving methods, the mining method currently still being used to exploit reserves on all three of the mines.

The mines were closed by De Beers in August 2005 and subsequently Petra operated Kimberley Underground under care and maintenance from September 2007. Petra was given approval to operate the mines under De Beers’ licence, demonstrating the level of confidence the industry leader has in Petra’s overall ability to rehabilitate and operate deep underground diamond mines. This care and maintenance period enabled Petra to complete all the rehabilitation work required in order to ready the operation to recommence production. The acquisition of Kimberley Underground completed in May 2010.

In December 2015, Petra announced the acquisition of an interest in the remaining Kimberley Mine assets in South Africa from De Beers Consolidated Mines Proprietary Limited, in consortium with Ekapa Mining (Pty) Limited, an established Kimberley-based diamond tailings producer. The Kimberley Mines acquisition comprised of a number of tailings dumps in Kimberley and the high volume Central Treatment Plant, at a cost of ZAR102 million (ca. US$7.2 million).

Petra and Ekapa Mining then entered into a joint venture agreement in July 2016, in order to combine their respective operations under one business unit.

The Kimberley Underground mines have a history of producing large diamonds and fancy yellows, such as the Oppenheimer (253 carats rough). The largest diamond ever recovered at Kimberley Underground was +800 carats and the mine is also the source of the Kimberley Octahedral, at 616 carats, one of the largest uncut diamonds in the world.

Reserves & Resources

Gross
Category Tonnes (millions) Grade (cpht) Contained Diamonds (Mcts)
Reserves
Proved
Probable 2.9 14.6 0.42
Sub-total 2.9 14.6 0.42
Resources
Measured
Indicated 6.7 18.4 1.22
Inferred 144.3 5.8 8.43
Sub-total 150.9 6.4 9.65

1. Resource bottom cut-off (Dutoitspan West Extension): 1.0mm.
2. Resource bottom cut-off (all other underground blocks): 0.5mm.
3. Resource bottom cut-off (surface tailings mineral resources): 1.15mm.
4. Reserve bottom cut-off: 1.15mm
5. Changes in Reserve and Resource figures due to mining depletionsadjustment to Bultfontein 865/885 and Dutoitspan NW Corner Mining Plans, re-estimation of Wesselton rim loading, and Bultfontein 760L removed from Reserve.
6. All KEM JV Reserves and Resources changed to 75.9% attributable to Petra from 1 July 2016 due to the formation of the KEM JV on that date.
7.US$/ct values of 260-275 for ROM and 85-90 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$M 82.3 57.7 +43%
Diamonds sold Carats 821,963 438,680 +87%
Average price per carat US$ 100 132 -24%
KUM Production1
Tonnes treated Tonnes 597,025 721,513 -17%
Diamonds produced Carats 87,783 88,572 -1%
Grade Cpht 14.7 12.3 +20%
KEM Production – attributable to Petra1
Tonnes treated Tonnes 6,153,657 3,583,758 +72%
Diamonds produced Carats 712,651 442,897 +61%
Grade Cpht 11.6 12.4 -7%
Total Production
Tonnes treated Tonnes 6,750,682 4,305,271 +57%
Diamonds produced Carats 800,434 531,469 +51%
Costs
On-mine cash cost per tonne treated ZAR 133 140 -5%
Capex
Expansion Capex US$M 23.9 14.7 +63%
Sustaining Capex US$M 4.5 2.1 +114%
Total Capex US$M 28.4 16.8 +69%

  1. Data represent Petra’s 75.9% attributable share (including both ROM production from Kimberley Underground and Tailings production).
  2. Data for FY 2016 in the table above represent production from Kimberley Underground ROM and Tailings production for the period 1 July 2015 to 17 January 2016 and Petra’s 75.9% attributable production from the Combined Kimberley Operations for the period 18 January 2016 to 30 June 2016.

 

Petra’s attributable production increased 51% to 800,434 carats for the Year (FY 2016: 531,469 carats).

Further to the modifications required to the Central Treatment Plant (“CTP”) in order to enable it to handle ROM material from the Kimberley Underground operation, KEM JV built up a ROM stockpile of ca. 75 Kt (attributable to Petra), which will be processed during H1 FY 2018. Since the Yyear end, KEM JV have completed the CTP modifications, being a new pan plant and permanent ROM crusher, enabling it to process ROM ore from the end of July 2017.

Mine Plan (all figures reflect Petra's 75.9% attributable share)

The KEM JV is a joint venture between Petra and its partner Ekapa Mining and incorporates the Kimberley Underground mine (mining the Bultfontein, Dutoitspan and Wesselton kimberlite pipes), extensive tailings retreatment programmes (with total tailings resources of some 140.1 Mt) and the high volume CTP. The combination of these diamond mining assets in Kimberley has yielded cost synergies and allows for a mine plan to 2035.

The KEM JV business plan envisages a combined steady state throughput of ca. 6.7 Mtpa (ca. 1.2 Mtpa ROM and ca. 5.5 Mtpa tailings) yielding ca. 574,500 carats, and to only utilise the CTP plant for both tailings and ROM processing from FY 2019 onwards

 

Kimberley schematic July 2015

 Click on schematic to enlarge.

Mining Right

Crown Resources (Pty) Limited (‘‘Crown Resources’’) holds a valid and unencumbered new order mining right (the ‘‘Kimberley Underground Mining Right’’) dated 7 May 2010. The Kimberley Underground Mining Right was initially granted to De Beers pursuant to item 7 of Schedule II of the MPRDA and was ceded to Crown Resources by notarial deed of cession registered in the Mineral and Petroleum Titles Registration Office.

The Kimberley Underground Mining Right confers on Crown Resources the exclusive right for the period covered thereby to mine for diamonds in relation to the areas it refers to until 6 May 2040. Pursuant to the MPRDA, the Kimberley Underground 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 Crown Resources to pay the South African Government a royalty for minerals recovered under the Kimberley Underground 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.

Crown Resources 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 Kimberley Underground Mines.

Highlights

  • May 2010 Acquisition by Petra
  • 800,434 carats FY 2017 Production
  • 9.7m carats Total diamond resource

Map

Kimberley Underground Diamonds

DSC_8217