Original publication on the Rough & Polished website
ALROSA's production strategy targeted to drive its output to 41 million carats by 2023 suggests a coordinated approach to putting Yakutia’s diamond fields into operation and out of operation to maintain the current levels of mining. Operations at Nyurbinskaya, the primary diamond pipe of the Nyurba Mining Division of ALROSA, will be suspended this year. The Nyurbinskaya open pit reached its intermediate level of 300 meters and needs reconstruction to extract ore at greater depths. This explains the commissioning of the second diamond pipe developed by the Nyurba Mining Division, which is Botuobinskaya, in early March 2015. It is this event that will become a major production milestone for ALROSA in 2015, following the expansion of the concentrating plant at Severalmaz in 2013 and the launch of an underground mine at Udachny in 2014. Over the past 10 years, Botuobinskaya is the first diamond field commissioned in Yakutia.
Botuobinskaya was explored by geologists of the namesake expedition before Nyurbinskaya, Igor Uvarov, Chief Operating Officer of the Nyurba Mining Division, told reporters saying that ALROSA decided to develop Nyurbinskaya first, because it was more significant in terms of kimberlite ore reserves.
Botuobinskaya is located within the Nakyn ore field, 3 km from Nyurbinskaya (there is another diamond pipe called Mayskaya also 3 km away). According to Igor Uvarov, geologists are still arguing about the formation of these three Nakyn diamond pipes. At first, it was thought that the pipes had come out of a single large diamond field and were moved away from it during the melting period of the local glacier. But the analysis of diamonds recovered from these pipes showed that they belonged to different ore bodies.
Getting started at Botuobinskaya will permit to offset the decline in ore output at Nyurbinskaya and maintain stable production at 7.5 million carats per year for the Nyurba Mining Division. After the reconstruction at Nyurbinskaya, both diamond pipes will be producing diamond ore at a full scale, thus creating a reserve capacity in case any of the functioning mines will be put on care and maintenance.
In 2015, ALROSA plans to produce 230,000 tons of ore or about 1 million carats of diamonds. In the future, after reaching its full production capacity of 400,000 tons a year Botuobinskaya will start to produce annually more than 2 million carats of diamonds. The ore extracted at Botuobinskaya is delivered to the main concentrating plant of the Nyurba Mining Division, № 16, which handles 1.5 million tons of ore (seasonal factory № 15 handles 500,000 tons of sand).
The project will be developed by an open-pit method, although initially, according to Igor Uvarov, ALROSA intended to develop all the deposits in the Nakyn ore field by way of underground mining, moving along one pit shaft and making lateral excavations. "But at the stage of a feasibility study the company concluded that it was necessary to pursue an open-pit mining," he said. The problem was in complex geology. For example, the ore body at Nyurbinskaya is diverging into 4 branches, and at Botuobinskaya it is split into three branches. At Mayskaya, it is narrowing proportionally, but its volume is half the size of the other two pipes. In general, the ore bodies located on the Nakyn diamond field turn very lean at lower depth, which makes underground mining uneconomic.
The stripping operations needed to prepare the Botuobinskaya ore body for commercial mining have been going on since 2013. Capex to prepare the mining ground reached about RUB 3 billion during 2013-2014. "Right now we ‘are sitting on the ore’ with the stripping works finished and a full-scale development of the diamond field ahead," Igor Uvarov said.
According to the State Reserves Committee of the Russian Federation, Botuobinskaya’s resources reach 93.021 million carats of rough diamonds at an average grade of 5.65 carats per tonne as at January 1, 2015. Its identified resources under JORC are registered at 13.68 million tonnes of ore as at July 1, 2013, their average grade being 5.19 carats per tonne and the total diamond content reaching 71.044 million carats.
Botuobinskaya is inferior to Nyurbinskaya by its ore reserves (the latter contains about 36 million tonnes of ore), but it outstrips Nyurbinskaya by diamond grade and diamond quality. Diamonds recovered at Botuobinskaya have a sufficiently high proportion of gem-quality and near-gem-quality stones and a higher degree of transparency. This spring, a pilot lot of diamonds from Botuobinskaya will undergo evaluation at Gokhran. Based on this assessment, these diamonds will be correlated with the current price list, and then a decision will be made on how this rough will be sold - within the mix of ALROSA-Nyurba or within the general assortment of ALROSA Group.
Last year, ALROSA received a general license for the export of diamonds produced by all the companies of the Group - for the first time in its history. Previously, ALROSA and its “sister-companies” - ALROSA-Nyurba and Severalmaz developing primary deposits and Almazy Anabara and Nizhne-Lenskoye developing diamond placers – used to receive licenses separately as independent legal entities, which made it difficult to sell diamonds. However, in practice ALROSA does not so far mix rough diamonds coming from all of its operations, as in this case it will have to calculate taxes for every one of the ‘involved’ subsidiaries.
When Nyurbinskaya will reach its project depth of 570 m in 2019 and production there will start to dwindle (at this time Botuobinskaya will only see its “daybreak”), it is planned to start developing Mayskaya, whose reserves were put on the balance sheet in 2014, Igor Uvarov said. The plan for the Nakyn ore field is shaped until 2042 with the ore production level set at 2-2.1 million tons per year.
Exploration works are continuing in the area of the Nakyn ore field, but it is too early to speak of any new discoveries, the chief operating officer of the Nyurba Mining Division said. Right now, the threshold of cost efficiency for ALROSA Group is maintained at a diamond grade of no less than 0.11 carats per tonne. Leaner ores are classified as off-balance. "Unfortunately, the current diamond pipes are not on the surface. All the surface manifestations of diamonds have already been found, so now we are mainly exploring for the so-called buried pipes, the development of which is more difficult because of the overburden reaching 50-100 meters. The "pyrope track" method by which Larissa Popugaeva found the first kimberlite pipes in Yakutia in the 1950s cannot be used now to find diamond fields," Igor Uvarov said. However, the criteria may change if market conditions will turn favorable or mining will find new methods.
Igor Leikin for Rough & Polished