The state government invited GRD – formerly known as POZ Minerals – to apply for the leases through its Expression of Interest process, which began in August 2018.
The contracts cover both open cut and alluvial mines at the site, which is located 135km east of Derby in the West Kimberley.
In a statement to the ASX, GRD management said, “Gibb River Diamonds now owns these leases outright, covering most prospective diamond bearing ground in Australia and with no private royalties. This magnificent opportunity allows the company to develop this exciting area with its huge potential and move towards our goal of becoming Australia’s next diamond producer.”
The company also operates the adjacent Blina Diamond Project site, for which it acquired leases in 2017.
As previously reported by Jeweller, diamonds were first sourced from the Ellendale mine in 1976. It once produced more than half the world’s yellow diamonds, and its previous operator, Kimberley Diamond Company (KDC), held an exclusive offtake agreement (future agreement) with Tiffany & Co.
However, the mine ceased operations in 2015 when the company was liquidated.
The Ellendale site subsequently fell into disrepair, with the West Australian government undertaking a $230,000 ‘rehabilitation’ process to prepare it for a new operator.
With the GRD announcement, WA Mines and Petroleum Minister Bill Johnston said, “It's not going to happen overnight, but restarting mining operations at the former Ellendale mine will be a high point in the rejuvenation of diamond exploration and mining in the Kimberley.”
Another Australian-owned company, India Bore Diamond Holdings (IBDH), has been invited to apply for additional leases at Ellendale. IBDH currently operates in a different section of the area’s diamond fields, where it has recovered gem-quality fancy colour diamonds from an alluvial deposit.
The future of Australian diamond mining
With the closure of Rio Tinto’s Argyle Mine later this year, analysts predict Australia’s annual diamond production will be reduced by 99 per cent, from 14 million carats in 2018 to 137,000 in 2021.
The nation’s diamond-producing potential was thrown into further doubt in September 2019 when provisional liquidators were appointed to Merlin Diamonds Ltd. It operated Australia’s only other active diamond mine, the Merlin Diamond Mine in the Northern Territory.
While Lucapa Diamond Company and GeoCrystal are currently involved in diamond exploration in Australia, restarting operations at the Ellendale Mine remains the most promising option for commercial diamond production in the near future.
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