Offshore Diamond Mining in SW Africa

Introduction

Offshore diamond mining involves exploring and mining for diamonds in the mud and silt deposits of the sea and along certain rivers.

Whilst the deep-sea mining industry is in its infancy, the offshore diamond mining industry is relatively large, mature, and active, with several operators, contractors and service companies. This makes it attractive to certain investors, as well as potentially providing operational learnings and expertise for the deep-sea mining industry.

The source of offshore diamonds is typically conventional diamond deposits on land. However, in certain areas, geological conditions mean that these diamonds are eroded by weather, rains and rivers, and are washed along rivers out to sea where they may gather in sufficient volumes to be commercially producible.

This industry is most prevalent along the Southwestern coast of Africa, in the EEZs of South Africa and Namibia, near the mouth of the Orange River.

Map of Southern Africa, highlighting the watershed and route of the Orange River. By Keenan Pepper.

History of Diamond Mining in South Africa and Namibia

South Africa and Namibia have a long history of diamond mining, dating back to 1867 and the discovery of a diamond on the banks of the Orange River in South Africa. This drew prospectors to the town of Kimberley in the centre of South Africa, resulting in a large-scale rush from the 1870s onwards.

Initial diamond finds were alluvial, meaning that the diamonds were found as deposits along riverbeds, but subsequent finds tended to be associated with the volcanic kimberlite pipes where diamonds often form. Prospectors initially worked small claims by hand, but increasing mechanization and centralization of production resulted in the industry becoming a monopoly in 1889, when De Beers became the sole producer.

Historical picture of diamong mining in South Africa

The industry grew in subsequent decades, with major diamond finds made across the country. Diamond mining has grown to be a significant part of the South African economy, and the country currently produces around 9.7 million carats of diamonds per year worth around $1.36 billion USD.

Diamonds were subsequently discovered in Namibia in 1908 near Lüderitz. The subsequent diamond rush created a large and booming diamond mining industry in Namibia, which currently produces around 1.8 million carats of diamonds per year, and around 2% of the world's gem-quality diamonds.

Where Offshore Diamonds are Found

The drainage basin, or watershed, of the Orange River covers the majority of South Africa. This area contains many diamond deposits, as shown on the map below:

Map of diamond deposits in South Africa. Note the Orange River and tributaries. By Council for Geoscience, Pretoria, South Africa.

Over millennia of rain and storms, these diamond deposits have been weathered and the diamonds washed into the Orange River. This was the source of the initial alluvial diamond deposits found around Kimberly. Over time, some diamonds are swept downstream, eventually making their way to the mouth of the Orange River and out into the Atlantic Ocean along the coast of South Africa and Namibia.

Consequently, the silt and sediments along the coast of South Africa and Namibia contain a meaningful volume of diamonds. The size and weight of diamonds mean that they are washed along the coast and congregate in geomorphological trap sites, including old river channels, terraces and storm beaches. This leads to commercially producible deposits. Furthermore, the process of weathering and transport by river favours more robust diamonds, resulting in a higher density of gem-quality diamonds.

Offshore diamond miners operating in the surf in Namibia

M.V. Pomona mining for seafloor diamonds off the Namibian coast

Pomona at work off the Namibian coast in the 1960s

Offshore diamond mining began in Namibia in the 1960s, when diamond miners working the sands along the coast began to venture into the sea. These operations were eventually consolidated into Debmarine in 2002, a 50:50 joint venture between De Beers and the Namibian Government.

South Africa issued their first Offshore diamond mining concessions in 1994, and since then several players have been active. These include De Beers, along with Alexkor Ltd, Transhex, Bluewater Diamonds, Nautical Diamonds, and Poseidon Marine.

Offshore subsea diamond mining concessions in Namibia

Offshore diamond mining concessions in Namibia

South African offshore subsea diamond mining concessions

Offshore diamond mining concessions in South Africa

Sea States and Environmental Conditions

The coast along Southern Namibia and Northwestern South Africa is barren, hostile, and is dominated by the Namib coastal desert. Rain is scarce and unpredictable, at around 10mm annually, and the land generally lacks surface water. Further, the area is almost completely uninhabited aside from a few small coastal settlements.

Sea conditions are hostile, with constant heavy surf on the beaches. This is caused by the exposure to the Atlantic Ocean and the consequent long fetch causing heavy seas. Offshore operations are therefore challenging, and the coast is renowned for its density of shipwrecks.

The relative lack of human inhabitants, flora and fauna along the coastal areas associated with offshore diamond mining mean that environmental and societal pushback has been extremely limited. Further, diamond mining supports 10% of Namibia's GDP, and the government is very supportive of this industry.

How Offshore Diamonds are Mined

Two different techniques are currently employed for offshore diamond mining: vertical or drill mining, and horizontal or crawler mining.

Diagram illustrating the two main offshore diamond mining techniques

Vertical, or drill, mining involves using a drillship employing a very large diameter drill of several metres in diameter to physically drill the sediment containing diamonds. Diamond-containing material is sucked up to the Production Support Vessel via a hose, where the diamonds are separated out. This technique is typically used in coarse ore bodies with slabs of sandstone or claystone.

Horizontal, or crawler, mining involves using crawlers that move along the seabed pumping gravel or sediment that contains diamonds up to the Production Support Vessel. Excavation techniques include the use of power water jets, cutter heads, and/or hydraulically power digging arms.

Active Offshore Diamond Mining Operations

Debmarine Namibia is currently the most active offshore diamond mining company. They currently operate 7 Production Support Vessels, plus a diamond exploration and sampling vessel, and produce around 500,000ct of diamonds per year.

Investment in Offshore Diamond Mining

Increasing complexity and difficulty of mining terrestrial diamond resources means that offshore diamond mining is an interesting investment opportunity for investors. The industry is relatively mature, with several operators, service companies and associated contractors.

Kenzoll Capital, a Dutch private equity firm, recently acquired the Adamastor offshore diamond mining vessel, and there are reports that this vessel will commence diamond mining in the Namibian EEZ.

Conclusion

Deep-sea mining is often regarded as a pioneering yet somewhat hypothetical industry, where only a handful of real-life tests and experiments have been carried out.

Conversely, the offshore diamond mining industry is large, active, mature and profitable. Various operators are actively exploring, sampling and mining offshore diamonds, and are doing so in difficult environmental conditions along a remote part of the African coast.

The deep-sea mining industry can potentially learn from the offshore diamond mining industry; particularly around operations, personnel, safety and best-practises. It's an industry to watch and learn from!