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Clayton’s road to diamonds no easy ride

God displayed a sense of humour by arranging that mineral riches can usually only be found in the most remote and inhospitable places on earth. Diamond digger Clayton Dodd, managing director of Striker Resources, is about to take delivery of a new separation plant that will quadruple the company’s ability to recover larger stones of up to 50 carats that until now have been missed or broken up in processing.

The contraption, built by Bateman’s in South Africa, has been fabricated and shipped to Darwin. From there it will be loaded on barges for a 30-hour voyage to Kalumburu in the North Kimberley, and then trucked 150 kilometres over a questionable road to the Ashmore site. Striker recovered more than 13,000 stones in the final quarter of last year, including individual gems up to 10 carats in size.

That has enhanced its reputation as the premier diamond explorer in the country, and probably the most advanced towards proving up a commercial project.

Mr Dodd predicts the Kimberley will become a major focus of world exploration, and he believes the markets have undervalued an exciting new page in the diamond story. There is evidence to support that view.

Luxury retailers Tiffany & Co. of New York has just turned in quarterly profits up from US$23 million to $39 million. Baby boomers now turning 50, have been on a buying spree for diamond rings and gem encrusted jewellery.

De Beers recently reported profits tripled to US$877million in the first half of this year, on sales up 44 per cent to $3.5 billion. Its stockpiles of diamonds have tumbled from $3.9 billion worth to $2.7 billion.

De Beers needs more diamonds, but it has had no luck in prospecting. Hence its $522 million vigorously defended takeover offer for Ashton. There is nothing like a bid to spruce up the profits of the target company and Ashton has been able to report doubled interim earnings of $22.6 million.

A win for De Beers would deliver a 40 per cent stake in the Rio Tinto operated Argyle mine and a giant footprint in the Kimberley. Mining houses all over the world will be watching closely.

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