This increase has come about in spite of a marginal decline of about 1.21 per cent in actual production during the period to 14,198,000 carats, against 14,373,000 carats in the same period of 1999. The increase in sales seems to have come about from nearly 10 per cent rise in prices during the first half of 2000, some change in product-mix and possibly more sales from inventories. The stock of roughs which had accumulated in the past has declined "to record lows".

It can be seen from the accompanying table that while production from AK1 pipe in the first half of 2000 was higher at 13,631,000 carats, against 13,451,000 carats in the same period of 1999, recovery of alluvial diamonds was lower.

Total production in the first half of 2000 was, thus, lower at 14,198,000 carats compared with 14,373,000 carats in the same period of the earlier year.

If the present tempo of production continues in the second half of 2000 as well, overall output of roughs in 2000 might be around 29-30 million carats, against 29.70 million carats in 1999. It might be interesting to note that Argyle production of roughs was of the order of over 40 million carats in 1998. However, the production rate was subsequently disrupted mainly because of the two-year development programme intended at widen the pit so as to expose more resource for exploitation. This programme is expected to be completed in 2001. This will result in stabilisation of production.

Argyle has been able to improve its productivity substantially both in terms of ore mined as well as that processed per employee in the last two years. Mining costs have, as a result, fallen by 37 per cent since 1997. Work is reported to be progressing on further optimising the process plant with modifications that would boost recovery being evaluated for approval in early 2001.

Meanwhile, prospects for extending by about 10 years the mine-life beyond 2007 have brightened. Argyle has completed its order of magnitude study which evaluated the ore body to provide development options beyond the current open-pit life of 2007. The work was based on a new interpretation of the main AK1 ore body, which is now believed to have developed from multiple volcanic vents. Drilling during the first half of 2000 has focussed on better defining the new resource.

The southern and central vents remain open at depth and there is also a programme to drill these areas. The options for extending the mine-life include a further cutback in the open pit (beyond the two currently planned) and an underground development. The order of magnitude study for the underground envisages a block caving operation encompassing a resource of around 80 million tonnes giving a potential mine life at least until 2018. A feasibility study, in this regard is expected to be undertaken soon. It is expected to be completed by early 2001. However, it is several years before that final development decision would be required.