Canada: a World Class Diamond Producer
By Anonymous
In 1991, the first of what would become many worldclass diamond- bearing deposits was found in the rough and harsh, barren terrain of Canada’s Northwest Territories. Seven years after that discovery Canada became a major diamond producer when the Ekati diamond mine opened in a remote arctic tundra region near Lac de Gras.
The diamonds that were found 300 km (186 miles) northeast of Yellowknife changed Canadian mining and global diamond mining jjk forever.
Six months after the Ekati Mine went into production it had produced 1 million carats and Canada was at the center of a diamond rush.
The Canadian diamond industry is now worth more than $2 billion annually. It employees about 1,200 people in its mine operations and more than 1,000 in the support industries. The industry has also been strong in sustainable development.
Because of the remote locations of the diamond mines, the industry has been able to provide for Native communities near the mines. Aboriginal persons make up as much as 40 percent of the work forces at two of Canada’s primary mines. Ekati and Diavik.
BHP Bullton’s Ekati Mine is 200 km (124 miles) south of the Arctic Circle and the Diavik Mine, owned by Rio Tinto’s Diavik Diamond Mines and Aber Diamond, is 210 km (130 miles) south of the Arctic Circle. Both operations are more than 100 km (62 miles) north of the treeline in an area of continuous permafrost.
Access is generally restricted to air except for a three-month winter window when a 400-km (248-mile) ice road is annually constructed. The road is only open for eight to 12 weeks a year and used for bulk supplies to be trucked in.
The ice road was first used to supply the Lupin gold mine north of Yellowknife.That mine closed but now the road is used to truck in one years worth of supply services to the diamond mines.
Despite the challenges such as location, the industry that did not begin in full until the summer of 1991 is now thriving. It is the third largest producer of diamonds in the world.
Within 10 years it is expected that Canada could supply at least 15 to 20 percent of the annual value of the world’s diamond production. And in 20 years, Canada could account for as much as 50 percent of the global supply.
Ekati diamond mine
The Dogrib and Dene peoples of the Northwest Territories called the area around what would become Canada’s first diamond mine “e’kati,” which means fat lake. The name is in reference to white quartz rock in the area that looks like caribou fat that is seen as a symbol of great value to the native people of northern Canada.
For many years, a few geologists, including Chuck Fipke and Stu Blusson, believed there were diamonds in the area. Along with BHP Billiton, they formed a joint venture with Dia Met Minerals. In the summer of 1991, they discovered diamonds at Point Lake. That discovery set off the Northwest Territories diamond rush.
What would follow would not only change Canadian mining, but it would also change the diamond industry as well.
In 1996, the minister of the Department of Indian Affairs and Northern Development (DIAND), and the premier of the Northwest Territories announced the Ekati project received final cabinet approval and had the full support of the government. An implementation protocol was signed by the companies involved, government organizations and four Aboriginal groups.
The Ekati diamond mine was the largest construction project ever completed north of the Canadian treeline. During the construction phase, more than 40 kt (44,091 st) of building materials, trucks, diesel fuel and food were moved by truck over the 475-km (295-mile) ice road from Yellowkntfe to the mine.
The project cost almost $900 million and took nearly a decade of planning, approvals and work to build.
In September 1998, the first diamond was recovered from the mine.
BHP Billiton Diamonds was named one the Top 100 Employers in Canada three times since it began operations at Ekati.
It currently produces 3-percent of the world’s diamonds.
Diavik Mine
Aber Diamond quickly joined the diamond rush and staked minerals claims in northern Canada in the early 1990s.
In July 2003, Aber Diamonds and Diavik Diamond Mines, hosted the official opening ceremony of the Diavik diamond mine.
All three kimberlite pipes of Diavik are located beneath the waters of Lac de Gras, which is just offshore of East Island.
Although the pipes are small compared with the world average, they contain a higher than average content of high quality and readily marketable diamonds
During its 20-year life, the mine is expected to average between 6 and 8 million carats a year. In 2005, Diavik produced 8.3 million carats.
DeBeers
Where there are diamonds there is sure to be DeBeers, the world leader in diamonds.
DeBeers acquired 67.8 percent interest in the Snap Lake project through a $305-million takeover of Winspear Diamonds in 2000. By the end of the year, DeBeers had purchased the remaining 32 percent for $171 million.
The Snap Lake project will be Canada’s first fully underground diamond mine when construction is completed in 2007.
It is DeBeers’ first diamond mine outside of Africa. It is located about 354 km (220 miles) north of Yellowknife, Northwest Territories.
De Beers expects to employ 500 people, with 250 people working in the mine at any given time. Lifetime of the mine is estimated to be 20 years.
Minable ore reserves are estimated at 16 Mt (17.6 million st) grading at 1.2 carats/t.The average diamond value is estimated to be US$144.
For much of the 20th century, DeBeers produced and controlled 90 percent of the world’s market. The company made famous the line, “A diamond is forever.”
The discovery at Ekati was one of the changes in the industry that made it clear that DeBeers was no longer in complete control, leading the company to look beyond Africa for diamonds.
DeBeers has also begun construction on the Victor project. It will be Ontario’s first diamond mine. It is 90 km (56 miles) west of Attawapiskat First Nation in northeastern Ontario. Construction on the Victor Mine began in 2006.
It witl be an openpit mine with a life of 12 years. It is expected to produce 600,000 carats per year.
DeBeers is also involved in the Fort la Corne and the Gahcho Ku projects.
Fort la Corne is 50 km (80 miles) northeast of Prince Albert in Saskatchewan. It is a joint venture between DeBeers Canada Exploration. Kenningston Resources, Cameco and UEM. The joint venture covers 63 of the more than 71 kimberlites found in the area.
The Gahcho Ku project is 90 km (145 miles) southeast of Snap Lake. It is a joint venture between DeBeers, Mountain Province Diamonds and Camphot Ventures. In 2005, a study found there is potential to mine three kimberlite pipes at the project that was formerly known as Kennady Lake.
When completed, it is expected to produce 3 million carats per year.
Jericho diamond mine
In 2006, a 59-carat gemstone with excellent shape and good color and clarity that was valued in excess of US$400,000 was found at Tahera’s Jericho Mine in Nunavut, 400 km (248 miles) northeast of Yellowknife. Additionally, two stones weighing 101 and 103 carats were recovered during the same quarter, although they were lower quality stones.
Construction of the Jericho Mine was completed during 2005. The first diamonds were produced in January 2006, less than 12 months after construction began.Tahera declared commercial production at the mine on July 1, 2006.
Tahera’s diamond purchase and marketing agreement with Tiffany & Co. ensures that the company receives competitive market prices for its Jericho diamonds.
Tahera has a strategic alliance with Teck Cominco. It enables Tahera to draw on the technical and financial strengths of one of the world’s leading mining companies. Tahera will use the proceeds from the C$30 million financing to fund working capital requirements and to fund capital improvements that may be necessary to optimize production from the Jericho Diamond Mine.
The interest in Canadian diamonds is high in part because of the guarantee of issue-free origin and Canada’s high social and environmental standards for mining. The Canadian federal governement’s Competition Bureau has defined a Canadian diamond as one mined in Canada. Rio Tinto Diamonds and Diavik Diamond Mines, BHP Billiton, DeBeers are signatories to the Canadian government’s Voluntary Code of Conduct for Authenticating Canadian Diamond Mines.
Canada has been a leader in the process to control the conflict diamond trade. It has supported the United Nations in the Kimberley Process initiative and, in June 2002, in Kananaskis. Alberta, Canada and other G8 leaders pledged support for an international effort. Canada has now passed legislation to control the import, export and transit of rough diamonds in Canada. By participating in the Kimberley Process, Canada is doing its part to halt the devastating impact that trade in conflict diamonds is having on peace,security and sustainable development in affected countries.
Most Canadian diamond mines are clustered in the remote Northwest Territories.
Copyright Society for Mining, Metallurgy, and Exploration, Inc. Apr 2007
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