Russia's Ministry of Natural Resources and Environment is concerned about a decline in the growth of the country's diamond reserves, minister Dmitry Kobylkin said in an interview with Interfax on Dec. 19.
The minister observed that state-owned diamond monopolist PJSC Alrosa is only exploring diamond-mining areas of "high exploration maturity."
"Existing diamond reserves will only supply current production for the nearest 8-9 years, that is, through 2027. After this time, existing deposits will begin to be phased out, with gradual reduction in production," Kobylkin said.
Diamond reserves at developed deposits will be fully exhausted by 2047, he added.
Alrosa has moved away from early-stage exploration over the past couple of years due to management changes. As of Jan. 1, the miner had diamond reserves of 1.18 billion carats by Russian standards, which will last about another 31 years at current extraction rates.
The company increased its diamond reserves by 57.8 million carats in 2017, according to State Reserves Commission standards, and mined about 40 million carats. Exploration and appraisal of deep horizons at the International pipe, which is part of the Mirny Division, drove the growth in reserves, as did a reserves estimate of the deep horizons of the Jubilee pipe.
According to Kobylkin, Alrosa is looking in the wrong places if it hopes to discover significant new deposits. He said the discovery of a significant deposit is "highly unlikely" in the areas where the company has primarily focused its exploration.
Kobylkin speculated that the discovery of "a large deposit with reserves of 400 million carats" would be possible but added that the discovery of any more large deposits like the Mir pipe would be unlikely in Russian territory.
Mir, which is one of Alrosa's largest deposits, flooded in August 2017, trapping 151 workers, and it has not resumed operations since.
Alrosa aims to define at least 154 million carats of new reserves from exploration between 2018 and 2024, with 104 million carats anticipated from existing fields.
"There has to be a reappraisal of category P3 diamond reserves. Most of these territories are closed off, while probable deposits are covered with sediment or trap rock," the official said.
In February, a group of leading Russian miners drafted a letter to the government outlining a proposal for companies to conduct their own regional geological surveys. The signatories, which included Alrosa, PJSC Norilsk Nickel Co. and Polymetal International PLC, were unsatisfied with the amount of exploration undertaken by government agency Rosgeologia, which has a monopoly on subsoil exploration and is the sole organization tasked with replacing mineral reserves in Russia.
Exploration budgets in Russia have fluctuated widely over the past 10 years, with mining companies tending to rely heavily on deposits discovered during the Soviet era.