A sparkling prospect
James Hughes-Onslow
Western Australia is currently pro- moting itself, on car number plates among other things, as the State of Excite- ment. The intrepid Perth motorist is likely to find, on arriving in Sydney, a few thousand miles away, that he is the butt of a few jokes: the West may be a big place (it is big- ger than India) but it is supposed to be quiet (only 1.3 million people) with not too much going on. What the WA government had in mind when they adopted this slogan was the quite astonishing series of mineral discoveries in the short history of the state. Apart from that, it enjoys more sunshine than the rest of the country without, so far at least, being crippled by the terrible droughts experienced in the east.
In the last century WA had not one gold rush but two, around Halls Creek in the
'Those of you who would like Hamlet to marry Ophelia and settle down, vote now.'
Kimberley region in the extreme north and also near Kalgoorlie, more than a thousand miles to the south. Since then coal, gas, oil, enough iron ore to keep Japan supplied for the foreseeable future, bauxite, uranium, nickel (remember Poseidon?), copper and tin have been brought to the surface, often in such quantities that speculation goes wild before the facilities are available to start mining. Last month, near the Kimberley town of Kununurra, about 1,400 miles north-east of Perth, production began on a diamond mine which looks like becoming the biggest in the world.
It is estimated that Argyle Diamond Mines should be producing 25 per cent of the world's diamonds, in weight though not in value, within three years of starting on underground deposits. On the basis of pre- sent discoveries, this should eventually grow to 50 per cent, but it could be a good deal more than that. The quality of the gems may also improve as exploration pro- ceeds. Most of this will come from underground Kim berlite, the diamond- bearing rock named after the Smith African Kimberley mines (each Kimberley took its name from the same British Colonial Secretary). For a start, however, work will be concentrated on alluvial diamonds, the 350 million dollars worth just tying around in the gravel. The aborigines have been carelessly scuffing diamonds with their feet for centuries, it seems, occasionally col- lecting them as attractive stones or useful tools but never according them any Par- ticular value. Unless De Beers, who virtual- ly control the price and supply of diamonds, can maintain the rarity value of these stones by holding them back from the dealers, we may all be in an aboriginal situation; instead of a diamond being for
ever, as the clever advertising slogan goes, we may have a diamond for everybody.
This should be very exciting for the peo- ple of Western Australia, but in fact it isn't being presented in that way. The whole enterprise is being played down for a variety of reasons, For one thing, if the word gets around that diamonds can be found in the Open air, prospectors may well respond in the traditional manner, with their wheel- barrows. They might not get the official Price but they could do very well. Australian trade unionists have already said that their workers may not be X-rayed on leaving the site after a shift, an important means of controlling theft by mine workers in South Africa. When diamonds start falling into the hands of the Australian Labour move- ment De Beers may.have met their match in .clandestine operations.
The main damper in the public's mind is that the bulk of the Argyle Joint Ven- ture consortium, run by a subsidiary of Rio Tinto-Zinc, recently signed a five-year agreement to sell its diamonds through the De Beers-controlled Central Selling Organisation (CSO) based in London. Five per cent of the output will be marketed separately through Antwerp by one part- ner, the flamboyant Perth entrepreneur Alan Bond. This is taken as a defiant gesture by Mr Bond rather than a signifi- cant dent in the CSO monopoly, but if suc- cessful and if more big discoveries are made Ill Australia, it could encourage other part- ners to go independent in five years' time.
The reason given for joining CSO is that the Joint Venturers do not have the necessary marketing skills to distribute relatively inferior stones'— they are mostly industrial diamonds, many with a slight brownish tinge. Tastes in jewellery have Often been quite radically altered by De Beers' advertising campaigns, notably with the invention of eternity rings to get rid of the tiny gems which flooded the market after Russia joined this unholy alliance in the Sixties, as Richard West reported from Kimberley, South Africa, in the Spectator Oh 1 January. The Russian marketing pro- bletn is different from the Australian one. They have a big home market for industrial diamonds but they need the De Beers' ex- Pertise to distribute their gems in the West. Australia will be producing brown and Yellow as well as white diamonds, so we should watch out for a campaign to per- suade us that these stones are really much subtler than the boring old translucent ones.
The main problem facing the CSO at the moment is that it has had to continue buying the world's production without be- ing able to sell it all. The longer the reces- sion lasts (and, according to the 100-page Argyle Project Briefing 'as the 1950's baby boom passes through the marriage phase') the bigger the CSO's diamond bank becomes. The last thing they want is more diamond discoveries, least of all brown ones in Australia. But the situation is so delicate that it is not in Australia's interest to rock the boat — not yet anyway. The last time I was in Kununurra, in the mid-Sixties, the big project was the Ord River irrigation scheme which, it was claim- ed, would enable cotton, rice, sugar cane and other sub-tropical crops to be grown at almost any time of the year. The Kimber- leys have a pleasant Mediterranean summer climate during their winter but during the summer they receive sudden deluges which erode the overgrazed land and make the dirt roads impassable. By building dams and roads and planting crops, the WA govern- ment hoped to conserve water and stop ero- sion and make civilised life feasible in the Kimberleys throughout the year. Unfor- tunately, the dreaded boll weevil and one or two other parasites also found it an ideal environment, and wiped out the cotton and rice. The sugar cane still survives, but the newly-created Lake Argyle is generally regarded as a painful reminder of a failed project. The irony now is that Lake Argyle probably conceals some of the biggest deposits of alluvial diamonds. Some would say it is a good thing that they are not readi- ly accessible: there are enough diamonds already.
It is certainly a good thing for the in- dustry that it now has the water available to process the diamonds from the gravel. In- deed, it is said that one of the reasons the old gold prospectors never found gems in the sand was that they didn't have enough free-flowing water to adopt the traditional panning methods used in South Africa and elsewhere. They sifted the sand in the wind instead. If they had been equipped with modern magnetic survey equipment they would have had no di,fficuity at all. Diamonds are among the more predictable minerals in the world: wherever you find Kimberlite you will almost certainly find a girl's best friend.
Perhaps the most fascinating aspect of the whole affair, and a major reason for the new industry to keep its profile low, is that it has world-wide political implications. No Prime Minister is fonder of denouncing South Africa than Malcolm Fraser, but apartheid is scarcely a serious issue in Australian politics. The purpose ot' banning visiting cricketers is to enable the PM to cut a more imposing figure at Commonwealth Conferences. Australia has little trade with South Africa, and when the CSO deal was approved by the WA government in December, neither international politics nor the morality of joining a South African- Russian cartel that controls the diamond trade were considered. Fortunately for Argyle, the matter was decided on economic priorities alone.
Things could be very different in five years' time when the agreement comes up for reconsideration. By then, Australian diamonds could be well on the way to dominating the world market. The oppor- tunity to take an effective swipe at the South African economy, and at the Soviet one as well, could be politically attractive. Not to mention the slogan 'Diamonds for everyone'. So sell your heirlooms while you can. It could all be very exciting.
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