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Canada – the emergence of a gemstone giant

Until recently Canada was not considered an important producer of diamonds and most attention was focused upon Africa, Asia and Australia. Twenty five years ago this began to change when two geologists, Chuck Fipke and Stewart Blusson, discovered diamond-bearing kimberlite pipes in the Northwest Territories. By 1998 BHP Billiton had exploited this find with the opening of the Ekati diamond mine, the first commercial diamond production site in the country’s history. This discovery unleashed the most intense diamond rush in North American history. The level of demand for wooden stakes to mark out each prospector’s territory was so vast they exhausted all available stocks held by local lumber suppliers! Within a decade three principle mines had been established and these were producing over 13 million carats of gem-quality stones per year, making Canada the world’s third largest producer of diamonds almost overnight. This transformed the rural economy of the sparsely populated Northern Canada.

maple-leaf-broach

(HM the Queen recently gifted this diamond maple leaf broach to the Duchess of Cambridge)

It is the high quality of Canadian diamonds that has made them so successful and they have done especially well in the domestic jewellery market, where they enjoy significant patriotic appeal. Due to the pace at which the Canadian diamond market was formed, most of the rough has to be exported as there are not enough local cutters and polishers available. Those that have been cut locally are often marketed with a laser-etched certificate number and national symbol, such as a maple leaf, a polar bear or the inscription “Ice on Fire” on the girdle, making it easier to prove their provenance. Canada has also sought to raise the profile of its diamonds around the world by emphasising the strong ethics surrounding their production. In an age where the ethical consumer is increasingly worried about buying goods that may have been produced by exploiting labour or disregarding the protection of the natural environment, Canada boasts a long history of democracy, political stability, legally protected workers’ rights and strong environmental legislation. This is in stark contrast to many African diamonds, a significant minority of which may be ‘conflict-gems’ or those obtained by unethical methods.

canada-diamond-mines-map

(The location of the principle Canadian diamond mines)

 Ekati mine

The high quality of Canadian diamonds has kept their price per carat up throughout the economic downturn in the late 2000s. The Ekati mine alone now supplies over 3% of total world production by carat weight but over 11% by value. The Ekati is located just 100 miles south of the Arctic circle and it was initially an open pit mine, although surface depletion has lead to underground mining more recently. The diamonds produced here are sold under the trade name “Aurias” and they are certified via the “CanadaMark” laboratory. Current estimates are that the mine will be exhausted by 2020 but subterranean reserves adjacent to the present site are thought to contain enough stones for a further 10 years’ production beyond that.

Diavik mine

 After the success of Ekati, the Diavik mine become the next production site to open. It is operated by the Harry Winston Diamond Corporation and Diavik Diamond Mines Incorporated and it is situated approximately 20 miles from Ekati. However the geological conditions at the site are more challenging as the gem bearing seems were discovered to be at the bottom of the frozen Lac De Gras and can only be accessed by drilling through the ice. Originally a dam was formed and the water pumped out to allow open cast extraction but upon surface depletion production moved underground.

canadian_diamonds_ice

(An example of how the Canadian stones are advertised to the world)

Jericho mine

 The Jericho diamond mine followed the Ekati and Diavik as the third major production site. Unlike the first two it has not enjoyed the same level of success and it only produced stones from 2006-2008. Some more recent attempts have been made to increase its production with only limited success.

 

Snap Lake mine

 Snap Lake was the fourth mine into production and the first Canadian operation owned by De Beers. It was also the first entirely underground Canadian diamond mine. The mine was productive from 2008-2015 but failed to turn a profit.

Victor mine

 This was the fifth mine into operation and it was developed by De Beers as an open cast pit. Situated in Ontario, it was that province’s first diamond mine and remains productive.

Gahcho Kué

 The sixth mine to open, it is a joint venture between De Beers and Mountain Province Diamonds. Production here only began in 2016 and is forecast to produce around 4.5 million carats of diamonds per year for the next 12 years.

Renard Mine

 The seventh mine into operation and the first in the province of Quebec. It is situated 500 miles north of Montreal and it is owned by the Stornoway Diamond Corporation. Renard is projected to produce about 1.6 million carats of diamonds per year at a predicted average value of $155(US) per carat.

Chidliak

 Chidliak is a planned open cast mine on Baffin Island, Nunavut Province, which is due to enter into service in 2020. There are however some logistical challenges relating to this site, not least the requirement to build a 100 mile long heavy duty road at a projected cost of almost $100 million. A planned joint venture between Peregrine and BHP Billiton fell through in 2011 and a further JV proposal with De Beers also went the same way in 2013. It is clear that the site contains many millions of carats of precious stones but the difficulties surrounding their extraction and distribution have caused continuous delays.

canadian-diamonds

(Canadian stones are very high quality)

The future of Canadian diamond exploration and mining

 Canadian diamond mining will always be challenging due to the vast scale of the country, its extremes of temperature and rugged terrain. Some mines are so remote they can only receive overland supplies for 6-10 weeks of the year, when the ice roads are in situ, and must rely on air drops for the remainder of the year. Their remoteness also means the labour force require entire towns to be built, with all the infrastructure that entails. Labour costs are significantly higher in Canada mines versus those Africa and southern Asia and Indian cutters are substantially cheaper to employ than their North American counterparts. Additionally the surface finds are diminishing, forcing continued production to take place underground, where costs are 50% higher in normal conditions and sometimes higher still when operators must pump water out to retrieve stones from below the water table. However due to the quality of the stones and quantity in which they have been found, Canadian diamond mines on the whole have shown great potential. The ethical status of the stones has also proved to be a brand building ace up the Canadian producer’s sleeve and a patriotic domestic market has devoured a good many stones locally. Due to the fact that the easy pickings at the surface have now been largely depleted, new exploration has reduced in recent years. In spite of this new finds have been recently unearthed in Alberta, British Colombia, Northwest Territories, Nunavut, Ontario and Quebec so the immediate future of the Canadian diamond mining sector seems assured.