Lessons From Marine Diamond Mining

Large scale, profitable, offshore mining of cassiterite started in 1907 around the coast of south Thailand and continues today in Indonesia. The more complex marine mining of diamonds commenced in the early 1960?s and is now an established industry off the coast of Namibia in southern Africa. The activities have involved many diverse organisations, and have required the development of new marine mining equipment. De Beers Marine, more recently as contractor to Namdeb, has been the dominant producer since 1989. Smaller, public, mining companies, registered in South Africa, Canada and the U.K., have achieved mixed performance results, but the total annual revenue from offshore diamonds now exceeds about US$ 180 M. With the benefit of hindsight, there are some useful lessons to be learned from the experiences. Mining of placer deposits at sea is more difficult and more costly than on land. It justifiably commences in response to a market demand for a product that cannot be supplied in sufficient quantity from onshore sources, not because the marine resource exists. The high costs can be offset in places by submarine grades so high that they have not been seen on land for a century. Technical and commercial success requires a combination, and a sufficiency, of ore reserves, capital, experienced people, and technology. Economic viability is not achieved easily and some diamond mining companies have experienced a very short productive life, terminating in their acquisition or liquidation. The reasons for failure in marine mining, regardless of whether the product is diamonds, gold, or tin, invariably are similar and fall into two categories. Those outside a company?s control include the sea conditions, taxation and fiscal climate, security of lease tenure, and the diamond market. The others, assignable to the company, provide important instructions for those who may aspire to advance the cause of marine mining.