ALROSA’s mining goes underground

Original publication at Rough&Polished website

25.06.2014

By launching an underground mine on the Udachny Diamond Field in June 2014, ALROSA completes the ten-year period of construction on this site, as well as its underground mines construction program. The Udachny Mine with a production capacity of 4 million tonnes of ore per year (and average diamond grade reaching 1.31 carats per tonne) will be the largest underground mine of ALROSA and one of the three largest in the world.

Udachny (meaning ‘lucky’ in Russian), which was discovered in 1955 and turned to be the second diamond field found in the USSR after the Zarnitsa Diamond Pipe, bears its name quite justifiably – Zarnitsa’s ore has a diamond grade 10 times lower than that of Udachny. When Udachny started to be developed in 1967, a village of the same name sprang up in its vicinity, which turned into a town in the late 1980s. The old village was closed - largely because it was located dangerously close to the epicenter of the nuclear explosion carried out in 1974 to create a dam for the concentration factory (commissioned in 1976 with a nameplate capacity of 11 million tonnes of ore per year). Now the town's population is about 11 thousand people, which is twice lower than at the beginning of operations in the 1970s. The town is just 14 km from the Arctic Circle and winter here lasts up to 8 months, while the average annual temperature reaches -14°C. All buildings here are sitting on stilts due to permafrost.

The ore body of Udachny is divided into two arms, Eastern and Western, differing in their diamond grades (the Western arm is twice as rich compared with the Eastern arm). The diamond pipe is explored to a depth of 1.4 km. The open-pit mine is 1.5 km in diameter and its depth, which is 640 m, makes it possible to call Udachny the largest quarry in the world.

Open-cast mining at Udachny has been going on since 1971. During this period, the mine produced over 350 million tonnes of ore valued at more than $ 88 billion (at a price of $ 99.1 per carat). Ore is being extracted by the drilling and blasting method, after which it is loaded by excavators and loaders and delivered by trucks to Concentration Factory No. 12. Mining operations are maintained in a circular pattern developing from the center to the periphery of the open pit. Now the mine reached its design depth (further operations are fraught with the danger of wall collapsing) and ore reserves for open-cast mining are almost exhausted. This kind of operations at Udachny will be stopped in 2016.

In the 1990s, Udachny accounted for about 80% of ALROSA’s output. After 2012, Udachny was overtaken in terms of production by the Yubileinaya and Nyurbinskaya Mines. Udachny will not be able to win back its superiority in absolute volumes of output - according to the long-term development plan of ALROSA until 2021, the leader in this respect will be the Aikhal Mine. But owing to their quality and correct shape the rough diamonds recovered at Udachny are among the most expensive, being second only to those mined at the Internatsionalnaya Diamond Pipe (belonging to the Mirny Mining Division of ALROSA), as Alexander Makhrachev told the reporters invited to visit the mine.

The most common shapes of diamonds extracted at Udachny are regular octahedrons and rhombic dodecahedrons. “These are genuine diamond shapes. Diamonds from Udachny are selling well, as is the case with diamonds recovered at Internatsionalnaya and Mir,” he said. About 67% of the total diamond weight at Udachny belongs to gem-quality rough and the proportion of bort does not exceed 2.5%.

The Udachny Underground Mine reserves exceed 108 million carats. In terms of reserves, Udachny is one of the largest primary diamond deposits in the world, second only to Catoca (142.6 million carats) and Argyle (117, 9 million carats). Alexander Makhrachev said there were also signs that the ore body was increasing at the horizon levels, which will permit to extend mining operations for at least 5 years.

Udachny’s reserves will be enough for 60 years of diamond mining at a rate of 4 million tonnes of ore per year after the mine will reach its full capacity annually yielding 6 million carats of diamonds. In the second half of 2014, mining operations there will be concurrent and major efforts will be aimed at preparing the ore body for mining. Starting from 2015, production will gradually increase and Udachny will raise and bring to grass 2.4-3 million tonnes of ore annually by 2016, starting to churn out the scheduled 4 million tonnes of ore per year by 2019.

The average diamond grade of ore extracted at the Udachny underground mine is 1.3 carats per tonne, while in the richest areas of the western ore body it goes up to 6.8 carats, according to Alexander Makhrachev. Going deeper into the ground, the quality and quantity of rough do not deteriorate, the CEO of the Udachny Mining Division said.

In addition to Udachny, ALROSA launched another three underground mines. The first was Internatsionalnaya (commissioned in 1999; 500,000 tonnes of ore per year), then Aikhal (commissioned in 2009; 500 tonnes of ore per year) and Mir (commissioned in 2009, but operating below its design capacity of 1 million tonnes of ore per year). So far, ALROSA has no plans to launch other underground mines. The commissioned underground mines will permit ALROSA to maintain diamond production at a high level in Western Yakutia and implement its strategy to drive its annual output to 40 million carats in the 2020s. Right now, the company’s underground operations account for about 25% of its diamond output, but this share will rise to 35% after all the mines will reach their full capacity.

The commissioning of the underground mine at Udachny (which will take place in June 2014) means that ALROSA will put into operation the first start-up facility at this site. It will include a skip shaft (to dispatch ore and rock) 9 meters in diameter and a ventilation shaft 8 meters in diameter - the largest in Russia thus far. The first stage of underground mining (down to the level of 580 m) will continue for 23 years, while the second stage mining operations (from 580 m and down to 1.1 km) are planned over the following 32 years.

To develop Udachny, sublevel caving will be applied, which the company has not used so far. The reason is the Yakutian permafrost, but below 380 m, it will be passed, said Alexander Makhrachev. Such a method was used by De Beers at the Finsch underground mine. The stowing method previously used at the underground mines of ALROSA proved too costly for Udachny, the CEO added.

Above-zero temperatures are permanently maintained in underground workings by 8 heater installations with a capacity of 4 megawatts. The workings are ventilated.

One of the main problems is mineralized water containing "half of the periodic table," says the CEO of Udachny. This water damages metal, so it is necessary to protect machines and cables. In addition, there is a relatively high proportion of methane. In the late 1990 and early 2000s, ALROSA was busy extracting useful components from this water, in particular bromine and iodine, available in commercial quantities. The idea was abandoned, as in this case, the water would be moved to the 4th grade waste, which would dramatically increase the cost of its disposal, making the whole scheme unprofitable. However, there are several upsides in this kind of mining environment – underground soil is hard due to permafrost making the mine structure more stable.

Alexander Makhrachev believes Udachny is not threatened by flooding, due to which the Mir Mine commissioned in 2009 did not reach the planned production level of 1 million tonnes of ore. “There are no prerequisites for repeating the Mir situation at Udachny,” Alexander Makhrachev said. “At Mir, they took an arbitrary decision to start mining from the 1st block, not the 2nd. This error still does not allow them to reach full production capacity.” He explained that flooding is not a general rule for the Yakut underground mines, and the inflow of groundwater in the area of Udachny is much lower.

Total expenses of ALROSA for the construction of the underground mine at Udachny from 2004 to 2019 are estimated at RUB 48 billion. Mining operations reaching the explored depth level of 1.4 km level will require total investments of RUB 63 billion. But the quantity and quality of rough at Udachny will allow to recoup that amount - the company estimates the amount of marketable goods, which will be received after the transition to underground mining, at $ 21 billion (in accounting prices).

During the last few years, the Udachny Mining Division of ALROSA also extracted ore at Zarnitsa located 23 km from Udachny - the first primary diamond field discovered in the USSR. Currently, mining operations at Zarnitsa are suspended for economic reasons. Transporting ore from Zarnitsa to the concentrator at Udachny turns out very expensive, Alexander Makhrachev explains. Now ALROSA is trying to find more efficient methods of ore transportation. “We are testing road-trains carrying up to 100 tons of ore at a time. By the end of the year, we shall get comparative options for a cargo aerial ropeway. And we shall choose some of the options,” Alexander Makhrachev said.

When Udachny will be running at full capacity in 2019, the Udachny Mining Division of ALROSA will be able to start developing a few new primary deposits of Western Yakutia licensed to ALROSA in 2011. The largest of them is the Verkhne-Munskoye ore field located 180 km from Udachny. Verkhne-Munskoye has total confirmed resources of 65.5 million tonnes of ore, Alexander Makhrachev said, while its annual ore production is 3 million tonnes. Verkhne-Munskoye includes 4 kimberlite pipes.

“We will start to deal with them in a more dynamic way, when we shall finish the preparations for commissioning the underground mine at Udachny. Right now we are working on a feasibility study,” he said. There are two options under consideration - either to build a local processing facility or settle upon an open-pit mine and transport ore to the concentration factory at Udachny. The final decision will be taken by the Executive Committee of ALROSA in late 2014 - early 2015.

In the meantime, ALROSA’s geologists are also conducting sampling at the Dalnyaya diamond pipe, examining the diamond grade and estimating the price of diamonds.

Sergey Bondarenko for Rough&Polished, from Udachny in Yakutia

This page was last updated on 25 June 2014 at 09.00