The north-west Queensland area has not been a producer of diamonds. Diamonds, however, have been produced from the Merlin Kimberlite Pipes in the eastern part of the Northern Territory and Australia's Argyle Diamond Mine in the Kimberley District of Western Australia is a major diamond producer. Exploration has also discovered a number of other Australian kimberlites some of which could potentially host diamond deposits.

Diamonds have been discovered during exploration in northwest Queensland. In the Thornton and Seymour rivers area, some 150km north of Mount Isa, a number of diamonds have been recovered from stream sampling, including bulk sampling, of the river gravels and the exploration work completed has been quite extensive. No diamond bearing pipes however have been discovered.

Superior holds the view that the northwest Queensland area has considerable potential for the discovery of diamond deposits.

Diamonds are the stable form of carbon within the earth's mantle under the older parts of the continents (cratonic areas) below about 150km depth. Violent volcanic eruptions of kimberlite or lamproite from deep within the earth are thought to occasionally collect diamonds on their passage through the mantle and to carry them to the surface. Diamonds are therefore sometimes found within volcanic pipes (diatremes) and dykes of kimberlite and lamproite. The larger deposits are hosted within diatremes.

Material ejected from these deep seated volcanos is eroded and any ejected diamonds and other minerals are initially washed into the drainage system and in the longer term buried in sediments. The volcanic eruption temporarily creates a deep crater which partially fills with volcanic material which falls back into the crater as the eruption terminates. The remaining partially filled crater usually becomes a crater lake which fills over time. Initially volcanic material surrounding the crater washes into the crater forming sediments of a volcanic origin (volcanoclastics). These are then topped up with sediments derived from erosion of the surrounding country rock. These latter sediments can mask the underlying volcanic pipe or diatreme but their circular occurrence is a clue to what may lie beneath them.

If the volcano occurs within an area that is actively eroding the crater sediments can be completely removed and the underlying kimberlite or lamproite beneath can be exposed. If the exposed kimberlite or lamproite is diamond bearing erosion will distribute diamonds into the drainage system. As kimberlite and lamproite are unusual rocks they contain minerals with unusual compositions which reflect their deep origins and passage through the earth's mantle. These minerals may also be distributed into the surrounding drainage system and some of them (indicator minerals) can be used in exploration for diamonds.

Indicator minerals have been widely used around the world in early stage exploration for diamonds. They have also been extensively used in Australia but with limited success. Much of the Australian craton has a low topographic expression and has been subjected to intensive weathering. Many of the indicator minerals do not survive intensive weathering and therefore do not enter the drainage systems. The Australia craton has also been subjected to repeated sedimentation events followed by erosion of the deposited sediments (eg Mesozoic and Tertiary events). In these cases the more resistant indicator minerals such as magnesian ilmenite (picroilmenite) and magnesian chromite become widely distributed and often considerably removed from their original sources. Indicator minerals work well in actively eroding areas and in colder climates. It is possible that the distribution of known diamond deposits around the world is a more accurate reflection of the validity of using indicator minerals in some areas than a reflection of the true distribution of diamondiferous deposits.

A number of geophysical methods can be used to locate diatremes which may contain diamonds. Geophysical methods rely on the rock type within a diatreme having different properties from those of the surrounding country rocks. Airborne geophysical methods used include magnetics, electromagnetics and gravity which rely on differences in the magnetic susceptibility, conductivity and density respectively. Kimberlites and lamproites are often intensely altered and therefore may not be magnetic. Magnetics would not be successful at locating a non-magnetic diatreme in non-magnetic country rocks. Kimberlites and lamproites would not normally be conductive. However, when exposed and weathered, they may be covered by a conductive surface clay layer which may be detectable by an electromagnetic surveys. If the overlying crater has not been removed by erosion and contains some conductive sediments electromagnetics might also be successful in locating the crater above a diatreme. Diatremes are likely to have densities that are different from surrounding country rocks as they are compositionally very different rocks. Airborne gravity surveys therefore potentially could detect diatremes. However the airborne gravity method is still under development. Ground gravity surveys are much more successful at detecting diatremes. They are now commonly used because of the development of superior equipment and the ease of determining elevations using modern GPSs. Commonly diatremes have low densities and are reflected by gravity low features which may tend towards being circular in outline.