The Sheahan Diamond Literature Reference Compilation is compiled by Patricia Sheahan who publishes on a monthly basis a list of new scientific articles related to diamonds as well as media coverage and corporate announcements called the Sheahan Diamond Literature Service that is distributed as a free pdf to a list of followers. Pat has kindly agreed to allow her work to be made available as an online digital resource at Kaiser Research Online so that a broader community interested in diamonds and related geology can benefit. The SDLRC Blog is a guest commentary by an industry expert about articles, themes and trends in recent issues of the SDLRC. This Q&A Blog explains how to use the SDLRC.
Comments by John Kaiser
I provided a 6 minute introduction to the PDAC 2021 session for Corporate Diamond Presentations with the title The Diamond Sector: A past or future to dream about?. The first part looked at natural diamond supply. The KRO Diamond Supply Center provides considerably more detail in the form of graphics going back to 1930 which includes carat and value charts for each country. Bram Janse has been helping me assemble older supply data. The second part addressed the natural versus synthetic diamond debate. The third part looked at the Peregrine Factor, the sad story that the most successful recent diamond exploration junior disappeared in 2018 with a $10 million buyout premium over the $100 million spend to take Chidliak from grassroots through PEA. This disappointing outcome for a junior that did everything right now haunts a very diminished field of diamond juniors, the third part of the presentation. The fourth part argues that the future for diamond exploration juniors lies with finding deposits that contain CLIPPIR diamonds, also known as "super-deep" and "type IIa" diamonds. The fifth part showed how individuals interested in the diamond sector can use the KRO Diamond Resource Center to research or monitor the sector through the scientific and media/corporate references Pat Sheahan publishes every month. To supplement my PDAC 2021 presentation I went through the references of the past year and have highlighted below those I think are worth reading or watching, especially if you are a relative newcomer to the diamond sector. The first 7 highlights deal with exploration history, the next 8 are about diamond formation with an emphasis on CLIPPIR diamonds, and the final 7 are about the diamond market.
On December 5, 2020 diamond exploration geologist Brooke Clements gave a presentation through the Vancouver Kimberlite Cluster which reviewed the history of Canadian diamond exploration from the 1992 discovery to the challenges of today. The VKC is a UBC-SRK seminar series which used to meet physically in Vancouver, but now is a zoom session which gets posted to YouTube. Brooke's presentation, which was followed by a 45 minute Q&A, can be viewed at this YouTube Link.
Bob Bishop, who stopped publishing his Gold Mining Stock Report in 2007, was very quick to recognize the importance of Dia Met's Ekati diamond discovery in Canada's Northwest Territories announced in late 1991. Canadian resource companies and their investors knew nothing about diamonds other than that they sparkled and cost a lot. There was much skepticism at the time, and in retrospect, when one reviews the published data from the perspective of today's knowledge about diamonds, one would have to side with the skeptics. But the market somehow sensed that Diamonds in Canada were a game changer for the entire diamond sector which proved to be correct. Bob was able to secure access to the non De Beers diamond gurus at the time, people like Chris Jennings and the late John Gurney, and in August 1992 he published a 57 page Special Report that amounted to a crash course about diamonds, not just for investors, but the hundreds of juniors that swarmed into diamond exploration. It was a tremendous accomplishment within such a short time and Bob recently made a pdf version available online so that people can revisit one of the most exciting periods in Canadian exploration history when evidence was not yet in hand that the Canadian diamond discovery was world class. Keep in mind that in 1992 the Internet did not yet exist and that all knowledge was transmitted by print or fax.
While Bob Bishop gave a diamond crash course to investors in August 1992, Patricia Sheahan, drawing on her extensive experience and knowledge built up through running what is now available online as SDLRC, single-handedly put together a diamond short course held Saturday March 27, 1993 in Toronto, Canada at the Royal York, the original home of the PDAC conference. This timely short course, put on just as Dia Met went beyond Point Lake with results from a new pipe, which I believe was Panda (so much secrecy back then even by those who deplored the secrecy of De Beers!), and which convinced the market the Canadian diamond discovery was real, became the technical crash course for every geologist and senior management of countless juniors moving into diamond exploration. The papers underlying the presentations by diamond sector experts have been scanned and assembled into a 379 page pdf which weighs in at a hefty 18.9 MB. Pat went on to organize and moderate a PDAC diamond technical session held every year since then on Monday afternoon which was attended by every important diamond person present at PDAC because Pat knew how to lure speakers with ground-breaking things to say. I remember one year when I had to leave early from a lunch with Peregrine's Eric Friedland and Brooke Clements because I absolutely needed to catch Johan Ferreira's talk about how to use micro diamonds for grade prediction. Pat was also iron-fisted about the clock, but that sometimes clashed with her tendency to schedule last the ever-entertaining and edifying Chaim Even-Zohar. I remember a showdown that developed one year. He had run out of time but was getting into a topic that intrigues me, namely, how many diamonds does the world own, and what if they all came onto the market? As Pat struggled to end the session on time, I remember on the one hand wishing, "let him keep talking, there is nothing but booze-ups after this session", on the other hand thinking, "if she lets him get away with this, how will she ever control the others?" To this day I'm still wondering what else Chaim had to tell us, so you can guess who won that showdown.
John Blaine presents a 1:12 hour long Overberg Geoscientists Group talk about Falconbridge's diamond exploration activity in Botswana during 1975-1988 featuring key people like Chris Jennings, Hugo Dummett and John Gurney.
Proponents of synthetic diamonds argue that lab grown diamonds can never be accused of the horrors associated with natural diamonds recovered in so called "conflict zones" where diamond mining is organized by parties engaged in a political conflict. Less well understood is that conflict diamonds tend to emerge from alluvial diamond mining operations rather than bedrock diamond mines. Tania Marshall explains the world of African alluvial diamond mining in her "GSSA Travelogue".
This GIA Presentation by Evan Smith builds on the idea first presented in 2017 that Type IIa diamonds, diamonds with zero or almost no nitrogen content (the source of yellow color), which explains their colorless nature, were formed in "super-deep" conditions as a result of the subduction of oceanic plate carrying a carbon payload in the form of sea-shell derived carbonates. These flawless or near flawless diamonds also known as CLIPPIR diamonds have been a mystery because of the absence of inclusions except for rare black specks long assumed to be graphite. Smith was part of a GIA study which used non-invasive techniques to analyze these specks, which turned out to be an iron-nickel alloy which, when it occurs in rocks at the earth's surface, is called awaruite (natural stainless steel). At 450-650 km depth the mantle is assumed to consist of a molten combination of iron and nickel. Finding that Type IIa diamonds on occasion contained fragments of molten iron-nickel alloy helped establish the super-deep origin of Type IIa diamonds.
This GIA Knowledge Session deals with kimberlite magmas, the "elevators" that start below the diamond stability field within the lithosphere where diamonds form, entrain material containing diamonds during their ascent, and eventually emplace their diamond payload within dykes or sills that chill before making it to surface, or erupt rather violently at the earth's surface. Evan Smith has played a major role in explaining the nature of CLIPPIR diamonds (Cullinan like, Large, Inclusion Poor, Pure, Irregular, Resorbed), which appear to be formed at 450-650 km depth ("super-deep") from subducted ocean floor material that under-plated cratons. While it has been a given that kimberlitic magmas have nothing to do with the setting within which diamonds form because the kimberlitic magma is spawned deeper, the fact that kimberlites have managed to entrain CLIPPIR diamonds that formed super-deep has raised the question as to how do kimberlitic magmas manage to entrain CLIPPIR diamonds as part of their payload? How deep do kimberlitic melts begin, or, is there something going on in the mantle which moves CLIPPIR diamond host material into position beneath the lithosphere so that kimberlitic melts forming shallower than the 450-650 CLIPPIR diamond formation zone can entrain them? The magic questions are, where, relative to cratonic keels, might CLIPPIR diamonds have formed, and what might be the composition of kimberlitic magmas capable of having scooped up CLIPPIR diamonds?
This Gems & Gemology Spring 2020 article discusses how diamond resorption (dissolution) takes place within the mantle where the formed and within the kimberlitic magma during its ascent after the diamonds have been entrained.
I have flagged this scholarly article even though it costs money to view it because it is about the Saskatchewan Craton which hosts the low grade FALC kimberlites where Rio Tinto is now the majority JV partner with Star Diamonds. This kimberlite field is notable because it is the only one in Canada where type IIa diamonds have been identified as being present. It is also an enigma. The authors Janina Czas (Hebrew University of Jerusalem), Graham Pearson (University of Alberta), Thomas Stachel (University of Alberta), and Bruce Kjarsgaard (Geological Survey of Canada) only focus on the lherzolitic nature of the lithosphere of this younger than Archean aged craton, and, based on the abstract, do not address the company claim that type IIa diamonds which would have a "super-deep" origin within the mantle beneath the lithosphere are present. If Canadian diamond exploration is to go beyond the high grade focus of the past 3 decades which foundered when De Beers bought out Peregrine for only $114 million, it will need to look at lower grade kimberlites whose potential CLIPPIR payload so far is not possible to identify without extensive bulk sampling. Given the subduction driven injection of organic carbon bearing ocean slab into the mantle between 450-650 km depth, and the uncertainty about how "super-deep" diamonds manage to become entrained by a kimberlitic magma, the Archean age of a craton may no longer be a relevant factor in places like Canada.
The CIBJO (The World Jewellery Confederation) has launched a new web site What is a Diamond? which appears to be a simplistic marketing site, but more important is that it has decided to make its Diamond Book which defines "diamond terms" available to the general public on an unrestricted basis.
Bain publishes an annual assessment of the global diamond sector in the form of an unrestricted pdf. Chapter 5, "Key industry trends and effects of Covid-19", is a must read for its discussion about lab grown and natural diamonds.
The Diamond Loupe has a special feature by Paul Zimnisky in which he describes the 5 key trends in the diamond industry: 1) Priorization of sustainability (the ESG push for mining carbon neutrality), 2) Tracking diamond provenance (source tracking with the help of emerging technology to allow natural diamonds to be certified as conflict-free and to distinguish them from synthetic diamonds), 3) A more disciplined supply chain (greater interaction between upstream producers and the mid-stream cutting-polishing segment to more effectively managesupply and demand, 4) Secular consumer demand growth out of China (Chinese deamdn for diamonds surged after the Covid lockdown, 5) Downstream innovation (the pandemic has spurred greater downstream online use for marketing and selling polished diamonds).
March 22, 2021 JCK interview with Edahn Golan about the marketing of lab grown diamonds (LGD), their emergence as a "fashion" category, and the divergence of price from those of natural diamonds, now at a 60%-65% discount, and the ultimate trend away from natural diamond price pegging to a cost plus model.
This Financial Post article discusses a plan by Dale Vince's Ecotricity Plc to make carbon neutral diamonds via chemical vapor deposition (CVD - heating a chamber containing a single crystal diamond seed filled with hydrogen and a carbon gas like methane wihich is heated to 1,200 degrees celsius) by using hydrolysis to split water into hydrogen and combining it with atmospheric carbon to create methane (CH4). Lab ground diamonds have been pitched as a "clean" alternative to natural diamonds whose producers are working to introduce source certification to deal with the conflict diamond stigma and establish carbon neutrality for their mining operations. Bain estimates that 6-7 million carats of lab grown diamonds were produced in 2020, of which 50%-60% were made in China. That contrasts to an estimated 111 million carats mined in 2020. The difficulty faced by the synthetic diamond industry is that the carbon status of the energy used in their production is hard to identify unless the diamonds are branded such as those produced by the San Francisco based and Leonardo DiCaprio backed Diamond Foundry which has a hydro electricity source. The article suggests that getting a premium for a lab grown diamond because it is carbon neutral is doubtful.
Hedgeye's Keith McCullough interviews Cormac Kinney, Founder and CEO of Diamond Standard, a startup with a plan to turn diamonds into a fungible investment. Given that there are thousands of ways clarity, color, cut and carat weight can combine to define the value of an individual diamond, this sounds like pie in the sky. But the proposal makes sense and the company is now in fund raising mode. The idea is to create a physical container into which is sealed a group of diamonds whose collective value will be the same as every other such container, each of which will have an embedded wireless encryption chip that uniquely identifies the "token" which will also be registered in a blockchain ledger. One can take physical possession of the token or leave it stored with a custodian so that it can be traded on a digital exchange. Only natural diamonds are allowed for these diamond coins. While it is possible at one point in time to assemble a large number of unique diamond sets into equally valuable diamond "coins", how does one prevent fashion trends as they affect the 4 C's from causing the value of individual diamond coins from drifting apart? The key, it seems, is that Diamond Standard plans to become a market maker, using its database of the composition of all the diamond coins it has created and what they are supposed to be worth to identify value drift and make trading decisions to buy or sell diamonds of the 4C type needed to arbitrage away the price drift. Presumably that includes the ability to remove and replace all diamond coins for which it acts as custodian, meaning that the owner only owns a specific diamond coin if physical possession has been taken. If this is workable new small diamond production could find a market when packaged up in this investment form. But what if it brings countless diamonds sold during the past hundred years out of the woodwork?