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21:56 | Aug 16 | 2011

We are building the biggest diamond mine in the world

Over a half-century period the JSC “ALROSA” has been engaged in open-pit exploitation of about two dozens of kimberlite pipes of various sizes geographically located not only in Western Yakutia, but also in the Arkhangelsk region and in the Republic of Angola. Yuri Doinikov, JSC “ALROSA” First Vice-President and Executive Director, tells us about the present-day situation in the diamond company.


– Mr. Doinikov, it is well-known today that the “ALROSA” Company has switched over to the underground extraction of diamonds. Is transition to the underground method of extraction of minerals a logical step? What are the reasons for that?

– This transition is absolutely natural, and it is related to the fact that the mineral reserve base of diamonds that had been created in the country earlier has to a Over a half-century period the JSC “ALROSA” has been engaged in open-pit exploitation of about two dozens of kimberlite pipes of various sizes geographically located not only in Western Yakutia, but also in the Arkhangelsk region and in the Republic of Angola. Yuri Doinikov, JSC “ALROSA” First Vice-President and Executive Director, tells us about the present-day situation in the diamond company.
significant extent been exhausted. In the end of the last century the Russian diamond extraction industry was quickly developing, first of all through intensive open-pit extraction of kimberlite ores. As a result, on the richest primary deposits – the “Mir”, “International”, “Aikhal”, “23rd Congress of the CPSU”, “Sytykanskaya” pipes –        reserves exploitable by the open-pit method have been worked out to projected levels. Reserves available for open-pit mining have also significantly depleted on the “Udachnaya” pipe – the largest and the most efficient deposit that earlier accounted for up to 50% of the total diamond extraction in Russia.
– But there must have been other factors as well, right?
– Yes, sure. We had to take into account that a significant portion of reserves reflected on the balance sheet accounted for the less rich deposits: “Yubileinaya”, “Zarnitsa”, “Komsomolskaya” pipes. The concentration of diamonds in them is several times lower than in the pipes that have earlier been worked out by the open-kit method: “International”, “Mir” and “Aikhal”. On less rich deposits the underground exploitation is more justified economically.
– So the future of the Russian diamond extraction industry entirely depends on the underground mining?
– It is true that the underground mining in Yakutia has a big future – even taking into account long normative periods of construction of underground mines, their significant capital intensity and complex industrial infrastructure. The value of extracted kimberlite ores is growing, just as the demand for rough diamonds is growing in the world market.
– In other words, it is the best time to invest in the underground extraction of diamonds?
– That is exactly right. And analysis of the underground mines construction in the Russian Federation over the period of the last 15 years shows that the JSC “ALROSA” is beyond all doubt one of the leaders, as the construction of four large underground mines has either been completed or started in the territory of Yakutia, – something that required concentration and investment of significant human, financial, material and technical resources.
– Which mines are those?
– Based on the results of the generalized technical and economic studies on the development of the company’s underground technology that had been undertaken earlier, it was decided that the first underground mine to be constructed by the company would be “International” (estimated output: 500.000 t of ore per year). This mine was put into operation in 1999.
“International” has basically become for “ALROSA” kind of a “test range” for testing and development of technological parameters of underground extraction of kimberlite ores. It is on this mine that technical solutions in respect of formation of exploitation blocks, technology for their preparation, and most importantly – in respect of application of the combine method of extraction of kimberlite ores were first implemented. The experience gained in the course of implementation of design solutions on this mine has created a basis for development of a national school of underground diamond extraction and permitted a further development of the underground technology on company’s other mines.
As a consequence, another two high-priority start-up complexes have subsequently been constructed and put into operation in relatively short terms: the one on the “Aikhal” mine in 2005 (estimated output: 500 000 t per year) and that on the “Mir” mine in 2009 (estimated output: 1 000 000 t per year). These two complexes laid foundation for a new national technology of extraction of kimberlite ores using the underground mining.
– And what about the fourth mine?
– The fourth one is currently at the stage of intensive construction, and upon all works are finished it will become the largest enterprise of underground extraction of diamond ores not only in the Russian Federation, but in the whole world (estimated output: 4 000 000 t per year). We are talking here about the “Udachny” mine, which will be a successor of the existing “Udachny” open-pit mine that served as a basis for construction of the town of Udachny and the biggest in JSC “ALROSA” Udachinsky Ore Mining and Processing Enterprise.
In total, over the period from 2010 through 2018 JSC “ALROSA” is planning to put 57.8 billion rubles of capital investments in the maintenance of the mineral resource base in exploitation, in the development of new mineral resource base and in the completion of construction of the underground mines which are already in progress. These investments should make sure that the company’s projected rate of production of diamonds for the period until 2018 and beyond will be achieved.
– Who made the design for this underground construction, which is something new for the company?
– It was decided that the general designer for all the underground development of the company’s mineral resource base would be the company’s institute – “Yakutniproalmaz” (the town of Mirny). Leading Russian scientific and production, academic and design institutions were engaged in the design of the underground mines: the leading institutes of the Russian Academy of Sciences (RAS) – the RAS’s IPKON, the IGD Institute of the RAS Siberian division, the VNIMI, the IGDS Institute of the RAS Siberian division, the IGD Institute of the RAS Urals division, and for the design – the design institutes “Dneprogiproshakht” (Ukraine), “Shakhtspetsstroy” Design Bureau (Moscow), “VIOGEM” (later – “NOVOTEK” Scientific & Technical Center, the city of Belgorod), “Norilskproekt” (Norilsk), “Gipronickel” (Saint-Petersburg), “Uralgiproruda” (Yekaterinburg).  
Along with the underground diamond mines under construction, the company has substantial experience in the design, construction and operation of underground geological mines used for carrying out a complex of geological exploration works, mainly on Yakutia placer deposits.
– The underground technology of extraction of diamonds is already used on a number of deposits around the world. This method is actively used in the Republic of South Africa, however, in a climate that is quite different from that in Yakutia. Could you tell us what are the key distinguishing characteristics of development of kimberlite deposits in the conditions of the Far North?
– Back in the end of the last century, at the early stages of assessment and analysis of feasibility of the underground mining on kimberlite deposits in Yakutia, it was noted that construction and exploitation of underground mines would be carried out in the most severe geological and technical conditions, in some aspects – unprecedented in the world practice. So comparison with RSA is not quite logical in this context.
This is first of all related to existence of worked-out open-pit mines, often filled with water and silt, in the projected mining sites; existence of a mass of permafrost, which dictates the need to support basements of industrial buildings and installations; existence of underground highly mineralized and gas-rich water-carrying collectors (with the rate of inflow up to 1200 m3/hour) with thick (up to hundred meters) deposits of rock-salt underneath. This water has a high level of so-called aggression, which leads to significantly shorter terms of service of standard installations and mechanisms.
In addition, all the kimberlite deposits in Yakutia are classified as dangerous in respect of gas and oil occurrences, so in accordance with the mining legislation special measures must be taken while carrying out any works here. Existence of numerous additional factors makes the choice of technical solutions substantially more difficult while designing the underground mines.
So design, construction and exploitation of the “ALROSA” underground mines are carried out in unprecedentedly unfavorable hydro-geological, technical and gas conditions of the West Yakutia deposits, which require resolution of very complex engineering and technical tasks related to the timely opening and preparation of the deposits for underground exploitation; hydro-geo-mechanical moni­toring; roadway maintenance and supports; roadway ventilation; protection of mining works against high-pressure, aggressive, highly mineralized underground waters, against oil and gas occurrences; winding of mineralized water and its disposal; finding optimal and efficient schemes and parameters of waste treatment; support of pile foundations of headframes in the conditions of permafrost soils of Yakutia. 
– And, of course, all the factors that you have mentioned affect costs, both those of construction and operational, don’t they?
– That’s absolutely true: construction and exploitation of our mines in such complex conditions has not only required long terms of construction (up to 8-10 years), but also entailed high capital and operational expenses, which lead to conside­rably lower economic efficiency of underground extraction of diamonds compared to their extraction in open-pit mines. To give an example, the estimated cost of construction of underground mines in the conditions of Far North varies from $450 million dollars (“Aikhal” mine) to $1 billion (“Udachny” mine). 
– So what level of costs would make products competitive?
– Switching over to underground mining with the extension of mining works to depths that exceed 1000 m certainly requires a systemic and more detailed approach to assessment of efficiency of the underground extraction of diamonds. To make products competitive, it is necessary to pay special attention to analysis and assessment of technical and economic parameters of exploitation of deposits, to application of modern and scientifically grounded methods of forecasting, to making current managerial decisions on the basis of broad monitoring of changes in the modern diamonds market.
ncreasing economic efficiency of the implemented technical solutions and measures taken is already the main objective of the company’s technical policy: we seek to constantly decrease costs, increase productivity and improve labor conditions.
According to the conclusions drawn by leading Russian and foreign expert institutions and in the opinion of many reputable Russian and foreign specialists, the underground technology of extraction of kimberlite ores implemented in JSC “ALROSA” is advanced and consistent with the modern level of development of the underground mining industry. So going back to your first question, the transition of JSC “ALROSA” to the underground technology of extraction of diamonds is today quite logical and permits to securely assure not only the company’s dynamic further deve­lopment, but also its becoming a world leader in the extraction and trade of diamonds.