Argyle Diamond Mine, Kimberley, Australia

April 19, 2010 - PRLog -- The discovery of the Argyle orebody marked the first time that a commercial diamond occurrence had been identified that is not hosted in kimberlite. The AK1 pipe at Argyle instead consists of olivine lamproite, from which diamonds had been eroded to form placer (alluvial) deposits nearby.

The deposit was discovered in 1979 by the Ashton joint venture, following some 12 years of exploration by various companies in the area. The discovery of alluvial diamonds led directly to their source, the AK1 pipe.

At the end of 2005, total measured, indicated and inferred resources in the AK1 pipe were 83Mt at a grade of 2.7ct/t, with a further 28Mt at a grade of 0.2ct/t in residual alluvial material. Proven and probable reserves totalled 111.7Mt grading 2.2ct/t, and containing 247.1Mct.

MINE DEVELOPMENT
Development of Argyle was a two-stage process. Alluvial diamond mining took place between 1983 and 1985, when the AK1 pipe came into production. Since then, this has been the principal source of ore, supported by lesser amounts of alluvial material.

Argyle operates as a conventional open-pit mine, with both lamproite and waste rock being drilled and blasted before being loaded out in a shovel-and-truck operation. The mine operates Bucyrus, P&H and Tamrock Driltech rotary drill rigs, O&K RH 200 hydraulic excavators and a fleet of Caterpillar 789B and Unit Rig MT4400 haul trucks, supported by Caterpillar wheel loaders, bulldozers and other ancillary equipment. The mine operation is monitored and vehicle movements are controlled using Modular Mining Systems' dispatch system, which uses a global positioning system (GPS) for accurate location of drills and other plant. Contract mining is used for the alluvial ores.

Much of the waste rock is highly abrasive quartzite, and Argyle has been a long-term user of the Skega dump body system in its haul truck fleet. This uses a suspended, reinforced rubber liner in place of conventional steel plating in the hauler body.

ORE PROCESSING
Argyle's processing plant uses a crushing, screening, heavy-medium separation (HMS) and X-ray sorter diamond recovery flowsheet. 3mm ore forms the feed for the heavy-medium separation circuit while -1mm material is rejected to the plant tailings.

Two-stage heavy medium cyclones with a specific gravity of 3.0 form the heart of the separation process, with material denser than the cut point forming the diamond-bearing concentrate. X-ray sorting separates the diamonds from residual waste in the HMS concentrate, the recovered stones being acid washed before sorting for shipment.

PRODUCTION

Since coming into operation, Argyle has produced over 670Mct of diamonds, with an average stripping ratio in the open pit of around 7t of waste being moved for each tonne of ore mined. Peak production was in 1994, at 42.8Mct. The pit is now so deep that the lack of manoeuvrability in the bottom has come to hinder mining operations.

In 2005, the mine processed 9.0Mt of lamproite ore to recover a total of 30.5Mct, its output having virtually regained the level achieved in 2003. 2004 production was markedly lower, with lower-grade and stockpiled ores being processed. In 2006, the operation treated 8.4Mt of ore to recover 29.1Mct. Argyle's production consists of 5% gem and 70% near-gem stones, with the remaining 25% being industrial diamonds. The mine also produces between 90% and 95% of the world's pink diamonds.

THE FUTURE

The company is expected to reach to a point where the lamproite 'pipe' narrows and continues at greater depth, making continued access to the ore by open methods uneconomic. Back in 2001, the company began looking at the option of developing an underground mine – launching a pre-feasibility study to investigate all of the possible alternatives and transition strategies.

The results of this led, in early 2003, to the approval of funding for a full feasibility study for a block cave underground mine and the construction of an exploratory decline. Both were completed during 2005 and in December of that year the decision was made to go ahead with the underground mine.

Work on the A$1.6bn development began on schedule and production from the new mine should begin in mid-2009; a low-grade open pit expansion is also planned which will help extend productive mine life until 2018.

Production capacity is predicted to average around 20Mct/y, compared with the current long-term average of 34Mct/y – and the high costs of the redevelopment have led to speculation that the mine might ultimately be put up for sale.

In addition to the shift to underground working, the company is also in the process of localising most of its workforce in East Kimberley, aiming to have 80% based there by 2010 – and half of them Aboriginal. This forms part of major corporate step-change, described as 'reassessing Argyle's relationship to the area in which it mines'.

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