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Diamond Mines - The Premier Diamond Mine

( Originally Published 1911 )

The greatest known diamond mine in the world is the Premier of the Transvaal, South Africa. In extent it is nearly as large as the four De Beers Consolidated Mines combined, and though the yield of diamonds per load of diamondiferous material is not now as great as that of some others, its yield in the aggregate can be made at will much larger than that of any other, and at considerably less expense.

The Premier of the Transvaal is sometimes called the New Premier, to distinguish it from the old Premier of the De Beers Consolidated Mines Co., now known as the Wesselton. It is situated in the Pretoria district of the Transvaal, near the railroad to Delagoa Bay, and twenty-one miles east of Pretoria. It was reached formerly by a wagon road from Van-der Merwe, a small station on the railroad seven miles away. In those days a conveyance from the station to the mine cost twelve dollars, but the company has since built a spur to the railroad at Rayton Station, 5 1/2 miles off.

It was known that there were diamonds in the Pretoria district for years before the discovery of the Premier mine, and properties were developed which did not pay; others were profitable, but proved to be small mines. There are three such between Van der Merwe and the Premier, viz.: the Schuller, the Montrose and the Kaalfontein. An article in the Queenstown " Representative," March 3, 1871, told of a 4 1/4 carat diamond found on a farm near Pretoria, also of others found on the banks of the Elands river and several other places. It was said that a government commission had been sent out to examine and report. No general interest was awakened apparently until 1897, at which time Mr. W. C. Schuller, the owner of the property in that district, succeeded in interesting scientists in the field. Mr. David Draper recognized some specimens shown to him in April, 1897, as true diamond-bearing rock, and in September of that year, he formally announced before a meeting of the Geological Society, the discovery of a true diamondiferous pipe in the Transvaal. He said it was enclosed by the Magaliesberg quartzite, a foundation much older than the Karoo beds about the Kimberley pipes. He had visited the locality with the owner in August and assured himself that it was a true pipe. One diamond had been found, and others were obtained on making a trial opening. Dr. Molengraf then visited the place, and confirmed Mr. Draper's opinion. The subject, with specimens, was then laid before the Volksraad at Pretoria,

The struggle for recognition being successful, the necessary assistance of capital was obtained and work began. In 1898, the year following, 22,843 carats were obtained in this district. Then came the war, which suspended all operations.

Meantime an enthusiastic believer in the possibilities of the Transvaal as a diamond-producing country, named T. M. Cullinan, had been prospecting in that neighbor-hood, and had become convinced that there were diamonds, and plenty of them, on the land of Joachim Prinsloo, a Boer farmer. Prinsloo farmed parts of his wild tract in the usual Boer fashion, and rented small parts of it to natives. He was of course aware of the possibilities of the country, though it is doubtful if he had much faith in his own portion of it; the desolate stretch of scrub and brush did not suggest visions of wealth and magnificence beneath it. Cullinan wanted an option on the property, and was willing to pay a big price, if, after prospecting, he was satisfied that his judgment was correct, but the farmer would only sell outright for 25,000. The property cost him 500. Nothing came of it, and Prinsloo tried in vain to sell at his price. Then came the war.

After the war, Cullinan made new overtures, but the Boer had raised his price to 50,000, and still refused to give a three months' option at any figure. Finally Cullinan bought it, some say with additional expenses which brought the cost up to 52,000. The farm was the freehold of Prinsloo's portion of Elandsfontein No. 85, district Pretoria, in extent 817 morgen, 431 square roods. (A morgen equals 2.11 acres.)

The Premier Company has since added to its possessions, a second portion of the farm Spitzkof, No. 31 (Wilge river) in extent 673 morgen, 420 square roods, and a portion of the farm Kameelfontein No. 106, in extent 236 morgen, 505 square roods, for the construction of three large dams in addition to one of 4,000,000 gallons capacity built on the Elandsfontein farm. The three large reservoirs have a capacity of 246,000,000 gallons, and are, fed from springs and borings on the land. In them the water is collected for use in the dry season.

Cullinan bought the property in October, 1902, and wasted no time in getting to work. On washing the first boring, he got a few garnets, olivines, and other stones usually associated with diamonds, but no diamonds. One may imagine the anxiety with which an-other trial was made. The second boring, on being washed, yielded eleven diamonds, one of them weighing sixteen carats. It was the beginning of a mine which has been prolific of large stones. In the first year or two, it produced four of over three hundred carats each; two between two and three hundred carats each, and sixteen between one and two hundred carats each. In January, 1905, the Cullinan of over three thousand carats was found, and another of 334 carats was brought to light in the middle of the next month. Satisfied by the experiments that diamonds were really there, a washing plant was immediately installed and put in operation.

In those first months of the mine's history, much prospecting was done. One hundred and eight shafts with a total footage of 2,362 feet, were sunk. Two bore holes, one of them a thousand feet deep, and the other 826 feet, were made and found to be all in diamondiferous ground, though they also showed considerable waste and inclusive rock. Little water was encountered, except at the juncture of the rim rock, where there was considerable.

The Premier was found to be a huge volcanic chimney of diamondiferous earth similar to those of the Kimberley district, but very much larger. It has since been found to cover an area equal to 3,571 mining claims of 30 by 30 feet, or about eighty acres. Of this total claim area, 3,441 claims have been worked down to an average depth of eighty feet. Unlike the Kimberley mines, it had no limestone capping, but under the tufaceous top, the crater was covered with a red clayey surface soil five or six feet thick. Under this lay about thirty feet of yellow ground which gradually merged in-to the unoxidized blue peculiar to the African diamond pipes. The blue of the Premier is much more friable than that of the Kimberley mines, and therefore does not need weathering as that of the other mines does, but goes direct to the washing plant, thereby eliminating the expense and loss of time resulting from spreading on floors. Below the sixty-foot level the blue became very hard. It was found, however, by sinking shafts, that it was a layer only, about eighty feet thick. Below it, the blue becomes soft and friable again.

The Premier mine is shaped like a pear. It is situated on a level plateau at an elevation of about two hundred feet, and is surrounded by hills and kopjes about a hundred feet high. The surrounding geological formation differs somewhat from the Kimberley district. Some sandstone outcrops, but diabase is the common rock. It has one great advantage over the De Beers mines, in that the rim rock is very firm, and therefore is not liable to fall as the shale formations of Griqua-land, about Kimberley, do. The contour of the surrounding surface also is favorable both to the drainage of the mine, and the storage of water by easily constructed dams.

The Premier crystals have a peculiar laminated appearance. Many of them also have an oily luster, and are quite blue. There are also many false colors. Nevertheless some are of the finest quality and color. It is a mine which yields the extremes. The percentage of bort and large crystals of gem material is greater than from any other mine. The immense Cullinan was of exceptional purity. All the stones cut from it, ranging from five hundred carats down, are flawless.

In the beginning, the Premier washings gave extraordinarily large results; nearly one and a half carats to the load. (16 cubic feet, equivalent approximately to a ton, now constitute a load.) The average of June, 1903, was 1.45; of July, 1.47; but from that time the yield steadily declined, the average to October 31 being 1.29. The highest average for any month in 1904 was .92; the lowest .62. The highest in 1905, .85; the lowest .26. The highest in 1906 was .35 and the lowest of average material .27. The yearly average since the opening of the mine and the value per carat is as follows:

1903 .................. 1.29 carats 27S. 8.5d.
1904 .................. .793 carats 23s. 1.2d.
1905 .................. .609 carats 23S. 6.29d.
1906 .................. .301 carats 28s. 4.2d.
1907 .................. .290 carats 18s. 0.2d.
1908 .................. .258 carats 14s. 9.4d.

The Cullinan is included in the valuation of 1906 at a nominal figure, and the proceeds from the big diamond are not included in the figures of 1907.

The number of carats found and the cost of production per carat washed is as follows :

1903 99,208/ carats 3s. 6.8d.
1904 749,653 1/2 carats 3s. 3.6d.
1905 845,652 carats 5s. 4.7d.
1906 899,746 carats 11s. 6.8d.
1907 1,899,986 3/4 carats 8s. 1d.
1908 2,078,825 1/4 carats 7s. 2.2d.

It may be that the weathering-out process to which the top layers in these chimneys have been exposed, reduces the bulk of the material and thereby increases the percentage of diamonds. It is also probable that the first work was done on promising leads. All the African craters have streaks and pockets in the diamond-bearing earth which are far richer than the average, and men experienced in mining there, know the indications. Some spots in the Premier carried twenty carats to the load. At the beginning of an enterprise like the opening of the Premier, it was but natural that the management would wish to make a good showing, and there-fore work the rich spots first, so as to get the largest returns in the shortest time possible. Good results meant money for development and a ready sale at good prices for the stock of the company. Having established the mine in the public confidence, and equipped the treasury with a surplus, the company could then afford to work over the entire area, many parts of which were richer in overburden and inclusions than diamonds, consequently the yield would fall to the mine's actual average, taking the bad with the good.

At the start, the equipment was small and the expense of mining and washing very moderate. The earth was removed by endless rope haulage from the open workings to the washing plant on a small elevation at the edge of the crater, where the tailings were simply run over to the other side. There was one washing plant of four pans, and one of six pans. The diamonds were all picked by hand. The material from the pulsators was first picked by skilled white sorters and afterwards, the tailings, by young Kaffir boys, for the small diamonds. It was difficult to get satisfactory help. In 1904 there were three open-cut mines in work, and it was estimated that there were ten million loads above the fifty-foot level, and one hundred and five million loads above the four-hundred-foot level, to which depth the work could be carried on by open cut.

Constant additions have been made to the plant, which for the year ending October 31, 1908, washed nearly 27,-000 loads per day, reckoning 300 working days in the year. In 1909 it will probably be increased to a capacity of forty thousand loads per day. By arrangement with the De Beers, grease tables were put in use and the whole plant has been rapidly brought to a high standard of efficiency, though, it being an open-cut mine, little machinery is required compared to that necessary for the under-ground workings of the De Beers mines.

The diamondiferous material carries fewer garnets than that of the Kimberley district, nor are serpentine and olivine as conspicuous. Mr. Troge describes it as a serpentive conglomerate, similar to the Kimberley blue, of a greenish-gray ground-mass inclosing deep green diallage-like augite, some olivines, biolite, magnetite, ilmenite, and pyrite with pyrope garnets.

In the beginning, the diamonds were taken to Kimberley every two weeks and sold to the Syndicate, but as the output increased, they were sold in the open market. Later, as the yield assumed proportions which threatened the stability of the market and made the Premier a formidable competitor of the syndicate established by the De Beers management, an effort was made to include the sale of the Premier output with that of the Kimberley mines, under the same management. A contract to that end was made October 28, 1907, for a short period, but it was terminated in March, 1908, and the Premier Company again marketed its own diamonds.

Notwithstanding the decline of percentage in yield per load, the increase of total yield was so rapid and phenomenal, that the men who had hitherto controlled the world's industry in diamonds were staggered.

Owing to a glut of diamonds in the market after a year of enormous production followed by a panic in the United States, which practically cut off demand from the industry's best customer, part of the plant was shut down January 1, 1908, thereby reducing the output thirty thousand carats per month, but the mine is evidently in a position, with the plant to be installed in 1909, to turn out at will from three to four million carats per annum. Back in 1905, the management declared that it was then prepared to supply up to twelve million loads of blue per annum, for one hundred years to come. Even at the present decreased yield per load, that would mean three million carats annually. At that time the company was considering additions to the plant at an estimated cost of 300,000. That equipment would enable the mine to handle 45,000 loads of blue a day.

Under the ordinance of 1903, which was put through when the Premier people had little influence with the Parliament and received scant consideration, the Transvaal Government receives six-tenths, and the share-holders four-tenths of the profits, after the company has first recouped itself for capital outlay on development and plant. Since the start, to October 31, 1908, this outlay has been large, amounting to no less a sum than 1,413,666, compared with which the initial capital of 80,000 is small.

Although the government takes sixty per cent. of the net profits, the balance pays enormous dividends to the stockholders. The net earnings of the mine for the first year ending October 31, 1903, were 102,863. The year following they were 667,738. In other words, the net earnings for the second year of the mine's existence, were more than eight times the amount of its entire capital stock. These profits were used in further developments. In the five years since, the profits have averaged over 750,000 per annum. The diamonds produced in the three years, 1906, 1907 and 1908 averaged over $1,500,000 per annum. From 1902 to 1908, 20,-000,000 loads of " blue " were washed. The company's share from the sale of the Cullinan diamond according to the directors' report of February 25, 1908, was 116,-682.

The present company was floated as " The Premier Transvaal Mining Company, Ltd.," with a capital of eighty thousand shares of one pound each. These were later changed into i60,000 preferred shares of five shillings each with a cumulative preferential dividend of 250 per cent. annually, and 320,000 deferred shares of 2s. 6d. each, thereby splitting up the stock into smaller shares without increasing the gross capital stock, and creating a wider field for speculation and manipulation. With an earning capacity of four to five hundred per cent. after paying the preferential dividend, the Premier deferred shares have fluctuated within about three years between 20 and 4 1/8, both preferred and deferred standing today at about 8.

It is worthy of notice and highly suggestive of the advanced conditions which will prevail in the new empires now forming in Africa, that the two new colonies of Great Britain, formed and governed by a mixture of English and Boers, show an advanced understanding of the natural rights of all the people to a share in the natural wealth which one or a few may chance to discover.

In the Transvaal, the government has established in practice the idea that natural wealth does not justly be-long entirely to the discoverer, but should inure largely to the people who through their government must protect and uphold him in the seizure and possession of it. This just recognition of the communal rights of the people is a distinct adjustment of methods, to the advanced condition and enlightenment of the people, and is a decided and advantageous contrast to the dealing of the neighboring Cape Colony, where the natural, ready-made wealth of the country, has been taken out to enrich a few men, who have grudgingly returned to the government the smallest contribution which could be arranged between grantee and grantor that would placate the general public and enable the exploiters to carry the country's natural treasures away. Whereas the Premier pays the Transvaal government sixty per cent. of its profits, the De Beers Company, a few miles off in the Cape Colony, is taxed only ten per cent. This unrighteous condition, established in the Cape Colony by the powerful influence of capital upon legislation at a time when the people of the colony did not understand the situation, which permits millions of the natural wealth of the colony to be carried annually to the mother country without adequate compensation, would place the industry in the Orange River Colony and the Transvaal outside the possibility of competition, were it not for the smaller cost at which the new mines can be operated. The area of the Premier is so great that it can be operated as an open working for years. It is estimated that the claim area to a depth of 70 feet contains 20,000,000 loads. It is being opened in a similar way to a quarry, after which manner open working has been carried on in the Jagersfontein mine in the Orange River Colony, it is said, to a depth of 700 feet.

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