Diamond Hunters Give up Search for Gems Too Hard to Find

Diamond explorers in many major producers of African countries are giving up on further discoveries of the precious metal. More than USD7 billion has been poured into the hunt for the gem since 2000, according to top supplier De Beers, and the results have been meager, with no major finds.

That’s led producers, including BHP Billiton Ltd. (BHP), to pack up their maps and drills and head for home. The amount spent looking for diamond-rich kimberlite formations underground has dropped by half since 2007, when exploration investment topped USD1 billion.

The dearth of new projects is putting pressure on an industry where supplies of accessible diamonds near the surface are depleted and the cost of going deeper is rising. De Beers opened the Orapa mine in Botswana in 1971 and its Jwaneng project, the world’s largest diamond mine by production value, in 1982. Botswana, the top producer, saw output drop to 22.7 million carats last year from 33.6 million carats in 2007.

“The odds of finding an economic kimberlite are extremely against you,” said Johan Dippenaar, chief executive officer of Petra Diamonds Ltd. (PDL), which spent just USD2.1 million looking for new mines last year and has abandoned prospective projects in Angola and Sierra Leone.

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