This post was originally published by the Investing News Network on October 25, 2014
Named for Kimberley, South Africa where they were first found, kimberlite pipes are large, conical rock formations known to host diamonds.
Diamonds, as investors already know, are formed nearly 100 miles beneath the earth’s surface in the rock of the mantle. At this depth in the Earth’s interior, carbon is subjected to immense pressures which are necessary to transform the mineral into diamond.
Of course, diamond mining does not involve expeditions to the centre of the Earth – and that is where kimberlite pipes come in.
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Click here to download a Special Edition INN Report - For FREE - on diamond investing and diamond prices in 2016 .How are kimberlite pipes formed?
Kimberlite pipes are formed when bouyant magmas formed deep within the Earth ascend along paths of weakness towards Earth’s surface. Along the way, the kimberlite magma breaks off pieces of the rocks it passes through.
If it happens to go through a diamond bearing rock the diamonds will be entrained and brought up to the surface as “passengers” in the kimberlite. Kimberlite magmas are rich in volatiles (a fancy word for gases) which are in liquid form. As the magmas ascend closer to surface the pressure decreases (due to less overlying rock), the gases come out of solution, changing from liquid to gas.
This results in an explosion which actually forms a crater, jettisoning out the country rock. The crater is then filled in with kimberlite magma ascending from below, as well as mixed kimberlite and country rock eroding in from above. The kimberlite pipes vary widely in size, from over 200 hectares, to not much larger than the chair you are sitting in.
One rule of thumb in diamond exploration is that the best chance of finding an economic diamond mine is near the centre of an archean craton. An archean craton is an ancient mass of rocks – over 2.6 billion years old – which often form parts of our present day continents. This is due to these areas of the crust being extremely thick, well over the 150 kilometers needed to form diamond, while also being relatively cool. This is important, since if the temperatures are too high, carbon will remain stable as graphite and not diamond. This coolness is due to the rocks having had such a long time to cool since formation.
Some of the primary tools used to locate a diamond bearing kimberlite are diamond indicator minerals. These are common minerals, such as garnets, pyroxenes, chromites, olivines, etc., which form in uncommon conditions (i.e., deep and relatively cool) when associated with diamond.
These unusual conditions result in very subtle differences in chemical composition, which highly experienced geochemists – such as Dr. Charles Fipke, discoverer of the Ekati Diamond Mine – have been able to elucidate.
Diamond bearing kimberlites are found on most continents, with major mines located in Botswana, South Africa, Angola, Russia, Canada and Australia.
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Click here to download a Special Edition INN Report - For FREE - on diamond investing and diamond prices in 2016 .What about colored diamonds?
Different kimberlite pipes produce different types of diamonds. The most striking example of this diversity is colored diamonds.
Diamonds acquire color through two means: either through the incorporation of other elements into the diamond lattice during formation, or via modifications to the diamond structure due to heat and pressure added since the diamond was formed. Some kimberlites more commonly contain colored diamonds. For instance, the Argyle Mine in Australia and the Misery kimberlite in Canada are known to commonly contain yellow diamonds, mainly due to high nitrogen contents.
Brown, red and pink diamonds are colored due to their exposure to high levels of heat and pressure. Blue diamonds, on the other hand, obtain their color from the inclusion of boron in their formation, while diamonds can be green either due to exposure to radiation, or due to extremely high nitrogen contents near the surface of the earth.
Colored diamonds are often highly prized, fetching higher prices by the carat than those that are not colored. Prices for colored diamonds have also tended to rise over time, making them a good investment opportunity.
It is beneficial for investors in both diamonds and diamond companies to understand how diamonds form, and how they are brought to the surface. Though the discovery of a diamond bearing kimberlite is uncommon (and one that contains economic quantities of diamonds even rarer) the discovery of a diamond mine is extremely profitable.
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