Diamond Mines in Canada
Many were surprised when Canada suddenly became a world-leading producer of gem-quality diamonds.
Article by: Hobart M. King, Ph.D., RPG
Diamonds in Canada?
Throughout the 20th century most people would never have thought about Canada being an important producer of diamonds.  Most people's knowledge of diamonds was fixed on mining operations in Africa and diamond trading centers in Europe.
All of this started to change in 1991 when two geologists, Chuck Fipke and Stewart Blusson, found evidence of diamond-bearing kimberlite pipes about 200 miles north of Yellowknife, Northwest Territories. One of these pipes was developed by BHP Billiton into the EKATI Diamond Mine, which produced Canada's first commercial diamonds in 1998.
Canada: A Major Diamond Producer
The EKATI discovery launched one of the most intense mineral prospecting rushes in the history of North America. Thousands of prospectors travelled to the Canadian North. Instead of bringing wooden stakes with them to mark their claims, they all intended to purchase stakes near their destination. So many wooden stakes were being purchased by the miners that local lumber companies were unable to meet the demand!
By 2006, three major mines were producing over 13 million carats of gem-quality diamonds per year. This placed Canada as the third largest producer of diamonds in the world.  The activity associated with the production of diamonds brought billions of dollars in commerce to the economy of the Canadian North.
The Attraction of Canadian Diamonds
Canadian diamonds have been very successful in the marketplace. They are high-quality diamonds that have been very popular in the Canadian gemstone and jewelry markets where people are excited to support the diamond industry of their own country. Much of the rough has been exported because only a small number of diamond cutters in Canada produce finished stones.
Many diamonds that have been mined and cut in Canada are documented and have their certificate number laser-inscribed on their girdle along with a trade logo such as a maple leaf, polar bear, CanadaMark symbol, or the words "Ice on Fire." This inscription assures consumers of their diamond's origin, connects it to the certificate, and has been a very successful marketing feature.
Canadian diamonds also appeal to people who are concerned about environmental and human rights issues. They are produced from diamond mines that have some of the world's highest environmental standards. In addition, the proceeds of the mines go to legitimate companies instead of groups who have obtained the diamonds through forced labor, theft or other exploitation. The certification process allows the stones to be tracked from mine through manufacturing, wholesaling and to the retail consumer.
Compared to rough produced in other parts of the world, the diamonds produced from Canadian mines are very high quality which supports a high average price per carat. This is good news for mining companies. BHP Billiton in 2011 reported that their EKATI mine supplied about 3% of world production on the basis of carat weight but 11% of world production on the basis of value. 
In recent years, Canada has been one of the top three diamond-producing countries in the world on the basis of carats produced. The Diavik and EKATI mines are expected to close during the next few years. Hopefully, new mines at Gahcho Kué, Renard, and Chidliak will help Canada remain one of the world's leading producers of gem-quality diamonds.
EKATI Diamond Mine
The EKATI Diamond Mine is Canada's original diamond mine. It was opened in 1998 by BHP Billiton, Canada, Inc. and is currently owned by Dominion Diamond. It was initially an open pit mine but mining moved underground as the surface mineable ore was depleted. EKATI is located about 200 miles north of Yellow Knife, Northwest Territories and about 100 miles south of the Arctic Circle. Diamonds from the mine are sold under the Aurias trade name and verified through the CanadaMark service.
The underground reserves currently being mined at EKATI are expected to be depleted by 2020. The company is working to develop a new open pit operation in additional reserves on an adjacent property. These additional reserves are thought to be adequate to extend operations for about ten more years.
Diavik Diamond Mine
Diavik was the second diamond mine in Canada to produce diamonds. It is owned by the Harry Winston Diamond Corporation and Diavik Diamond Mines Incorporated. It is located about 200 miles north of Yellowknife, Northwest Territories and about 120 miles south of the Arctic Circle. The pipes being mined were originally on the bottom of Lac De Gras and were discovered by drilling through the ice. To mine the pipes a dike was built around them and the water was pumped out. Open pit mining then began on the lake bottom. Production moved underground as the surface mineable ore was depleted. 
Jericho Diamond Mine
The Jericho Diamond Mine was the third diamond mine in Canada and the first in Nunavut territory. It is located about 250 miles northeast of Yellowknife, Northwest Territories. The mine was opened by Tahera Diamond Corporation and produced diamonds from 2006 to 2008 but the company lost money. In 2010, Shear Minerals, Ltd. acquired the property with the intent of bringing the mine back into production.
|Information Sources - Canadian Diamonds|
 What Countries Produce Gem Diamonds? Website article by Geology.com, 2010.
 Gemstones, Donald W. Olson, 2011, United States Geological Survey 2009 Minerals Yearbook.
 Diamonds and Specialty Products, BHP Billiton, 2011, quote from the corporate website.
 Diavik Diamond Mine Factbook, Rio Tinto, 2009, .pdf from the diavik.ca website.
 About the Snap Lake Mine, De Beers Canada, 2011, website article on Canada.DeBeersGroup.com.
 About the Victor Mine, De Beers Canada, 2011, website article on Canada.DeBeersGroup.com.
 About Gahcho Kué, De Beers Canada, 2011, website article on Canada.DeBeersGroup.com.
 Canadian Arctic Readies for World's Largest Diamond Mine Opening, website article on Mining.com, 2015.
 Lacking Local Support, De Beers Shelves Ontario Diamond Mine Expansion, Susan Taylor, 2017, website article on TheGlobeAndMail.com.
Snap Lake Diamond Mine
Canada's fourth diamond mine was the Snap Lake Mine, located about 150 miles northeast of Yellowknife, Northwest Territories. The mine is owned by De Beers, and it was their first mining operation outside of Africa. It was Canada's first completely underground diamond mine. Instead of mining a vertical pipe, the mine follows a kimberlite dike about 2.5 meters thick that slopes down under Snap Lake at an average dip of about 12 to 15 degrees.
The first commercial production at Snap Lake was in 2008. The mine operated for seven years without turning a profit.  The mine was located under a lake and was plagued by a continuous seepage of groundwater into the mine. This water was very costly to collect, pump out of the mine, and handle before it could be released. In December 2016, De Beers announced that they planned to flood the mine to reduce ongoing pumping and maintenance costs. Production at the mine cannot be restarted without a significant effort to remove the water and return the site to operating conditions.
Victor Diamond Mine
The fifth Canadian diamond mine to open was the Victor Diamond Mine located in Ontario about 50 miles west of Attawapiskat. It is an open pit mine owned by De Beers and was the first diamond mine in Ontario. Diamonds have been produced from one of sixteen diamondiferous kimberlite pipes on the property. 
Production at Victor commenced in July 2008, and the mine produced about 600,000 carats per year. The expected productive life was expected to be about ten years with a total production of about 6 million carats of gem-quality diamonds. The mine is expected to support production into 2019, exceeding its estimated total production by about 1 million carats.
De Beers would like to evaluate the Tango deposit a short distance away, which might support mining for five or six additional years. However, the company has been unable to begin this work without formal support from the First Nation of Attawapiskat. Hopefully, support will be obtained with enough time to complete the evaluation and get the new location into operation before layoffs and a production gap occur. 
Gahcho Kué Diamond Mine
Gahcho Kué is Canada's sixth diamond mine. It is located about 170 miles northeast of Yellowknife, Northwest Territories. It is a joint venture between Mountain Province Diamonds and De Beers Canada. Production began in 2016, and they propose to mine three kimberlite pipes beneath Kennady Lake.  A fourth smaller pipe is located nearby, and it may be mined as the project progresses. The mine is expected to produce about 3,000,000 metric tons of kimberlite per year and yield about 4.5 million carats of diamonds. The mine is expected to be in production for about 12 years.
Renard Diamond Mine
Renard is the seventh diamond mine to open in Canada and the first to open in Quebec. It is located in the James Bay region of northern Quebec, about 500 miles north of Montreal. The project is 100% owned by the Stornoway Diamond Corporation. Nine diamondiferous kimberlite pipes and the Lynx/Hibou kimberlite dike system are on the project property. The mine is expected to produce about 2.2 million metric tons of kimberlite per year, yield about 1.6 million carats of diamonds, with an anticipated average value of US $155/carat.
New Diamond Mine: Chidliak
Peregrine Diamonds plans to build an open-pit diamond mine on Baffin Island in Nunavut, Canada. They hope to start mining in 2020, but they must first solve a transportation problem. They need a 160 kilometer all-weather road (not an ice road) to transport a steady stream of supplies to the mine site. The expected cost of the road is $95 million.
Peregrine had an interesting first few years with this project. In 2011, BHP Billiton, the world's largest mining company and Peregrine's joint-venture partner, walked away. Peregrine then entered an agreement with De Beers that would allow De Beers to earn a 50.5% stake in the project. De Beers walked away from that in late 2013.
Since then the CH-6 pipe was estimated to contain over 11 million carats of diamonds at a grade of 2.45 carats per ton to a depth of 260 meters. The CH-7 pipe was estimated to contain over 4 million carats at a grade of 0.85 carats per ton to a depth of 240 meters. Four other pipes are thought to have economic potential.
Canadian Diamond Challenges
The diamond mines in Canada face a number of challenges not face by competing mines in other parts of the world. The first problem is their very remote location. The mines can only receive overland freight during a short "ice road" season that might last between six and ten weeks. Any supplies not delivered in that limited time window must be delivered by air. The mines must also have housing and full facilities for all of their employees because they are all located away from towns or settlements where employees could be housed. These serve as logistical and economical disadvantages for these mines.
A second problem is the cost of labor. Wages in African mines and Indian cutting facilities are very low compared to the wages paid to mining and manufacturing employees in Canada. The Snap Lake mine closed without turning a profit.
A third problem is the fact that the open pit mines are being depleted and continued work in the ore body requires underground mining - which costs about 50% more per ton of ore produced. Some of the mines also incur a high water pumping cost as they excavate below the water table. Nearby lakes serve as an infinite source of recharge water.
Canadian Diamond Opportunities
Canadian diamond mines enjoyed great success in their first two decades. Much of that success was supported by rich ores, containing high quality diamonds that could be produced by open pit mining. The diamonds produced by these mines were favored by consumers who value stones produced from mines that are environmentally responsible and conflict free. Canadian customers have also patronized gems obviously marketed as a Canadian product.
Although exploration for new deposits continues, the pace has dropped dramatically from the original boom. New discoveries in Alberta, British Columbia, Northwest Territories, Nunavut, Ontario, and Quebec are being evaluated, and some of them might be developed into profitable new mines.
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