* Company says it found positive signs for diamonds
* Faith is known to spur exploration in the Holy Land
* Potential new mines are rare in the industry
* Analysts say success rate about 5-10 pct
By Tova Cohen and Ari Rabinovitch
AKKO, Israel, May 30 Somewhere in the Carmel
hills of northern Israel, diamond exploration company Shefa
Yamim hopes to uncover the exact spot where faith meets science.
Inspired by the words of a revered rabbi who prophesised
that precious stones were divinely buried in the area, the firm
has been mining for about a decade along the steep hills and
lush valleys that surround the city of Haifa.
Now, Shefa Yamim, the first and only diamond
explorer in Israel, s ays it has found strong signs that
significant diamond deposits are indeed hidden in the Holy Land,
surprising many who had dismissed the mission as a pipe dream.
Potential new mines are big news in an industry that gets
most of its diamonds from 20 or so mines, and where no large
discovery has been made in 15 years.
Israel has long been a global leader for polishing diamonds,
but it was never considered to be a possible source for rough
diamonds, which it imports from abroad. Top Israeli diamond
dealers even have their own mining operations in Africa but with
booming demand for the gems driven by prosperity in China and
India there are certain to be many more speculative projects.
Shefa Yamim's workers have dug up thousands of geological
indicators -- including 77 macro and micro-diamonds -- in their
trenches and boreholes, said Chief Executive Avi Taub.
"It's a mission ... We're talking about divine providence,"
Taub, an Orthodox Jew who wears a skullcap and a long, white
beard, told Reuters at the company's offices in the coastal city
of Akko. "I hope I'm going to have the right to reveal it."
In 1999, Taub founded Shefa Yamim, which means "bounty of
the seas" in Hebrew, based on a conversation that took place 11
years earlier in Brooklyn, New York between the late Rabbi
Menachem Schneerson and the then mayor of Haifa. The dialogue
was caught on video.
"The uniqueness of Haifa is that it has a sea and it has a
valley -- and in the valley are precious stones and gems. The
holy one, blessed be he, did a wondrous thing, he concealed them
in the depths of the earth," the rabbi told his visitor.
Many of Schneerson's followers believe him to be the
messiah, making the comments a decree of sorts, and Taub
answered the call.
FAITH, FACT AND EXPLORATION
Religious belief and biblical verse have inspired others to
search for natural resources in the Holy Land.
In the same year Schneerson spoke about precious stones
buried near Haifa, he also received a letter from a geologist
who is now the chief explorer of Givot Olam, which is
drilling for oil in central Israel. The letter described how the
Bible and Jewish commentary both contain "a poetic description
of fundamental principles of modern petroleum geology".
Texas-based Zion Oil and Gas is exploring for
hydrocarbons in the same area as Shefa Yamim and was inspired by
a map of the 12 biblical tribes of Israel.
These companies are all optimistic, but have yet to announce
Shefa Yamim has licenses to explore 165,000 acres. The
company's website is filled with hard geological data, but also
contains Jewish scripture and commentary.
When Shefa Yamim chose to go public in Tel Aviv, a sceptical
Israel Securities Authority delayed the issuance for a year
until the Energy Ministry, which oversees the country's natural
resources, could confirm the findings. The company was listed in
April and has kept a market value of roughly $62 million.
Research analysts at Canada's Canaccord Capital think
early-stage companies like Shefa Yamim that have found
diamond-bearing kimberlite have only a 5-10 percent chance of
Only about 1 percent of kimberlite pipes - the geological
structures where diamonds are concentrated - that have been
discovered to date have been economically viable. They are
mostly found in South Africa, Siberia, North America, Brazil and
Shefa Yamim has until now been focusing most on alluvial
mining, which is shallower along the riverbed in the valley. It
will need a significant injection of capital if it is to dig
deeper to find bigger diamonds and move closer to its goal.
Shefa Yamim's consultant geochemist Mark Fedikow of Mount
Morgan Resources in Winnipeg, Canada, believes its chances for
success are as high as 20-30 percent due to the abundance of
mineral indicators. He thinks it could reach the point of
production in three to five years.
"There is no reason why you can't connect faith with
economics here," Fedikow said. "There is no basis to throw up
your hands and laugh. You accept what the rabbi said and
developments after are not based on faith but on hard fact."